Oil Spill Legislation scheme to nullify Judge Kissoon’s ruling for Parent Company Guarantee

Dear Editor,
In subservience to Exxon and realizing that they will lose the legal battle, the Government now plots its heralded scheme for an oil spill legislation to nullify Judge Kissoon’s decision decreeing that an Unlimited Parent Company Guarantee (referred herein as UPCG) must be provided to bear the full cost of any oil spill, above what the insurance covers. A spill without that UPCG could beget Guyana’s financial bankruptcy; and, a health and environment catastrophe for the whole Caribbean. So, this callous and immoral legislative scheme is a pathetic betrayal of our country and the Caribbean, while bringing merriment to Routledge and Exxon.
The sad reality is that any such legislation will pass in Parliament due to the PPP/C’s one-seat majority, and most critically, it will take primacy over the Judge Kissoon decision. I challenge the Government to prove me wrong by expressly including the underlying ratio of Judge Kissoon’s ruling into the legislation. Do that, and I will be the first to apologize and celebrate.
The legislation would replace Judge Kasson’s ruling with Routledge’s dictate reverently parroted by VP Jagdeo and Attorney General (AG) Nandlall that only “credible and reasonable” costs will be paid for an oil spill – the same words now sanctified in the recent Whiptail permit, and no doubt a precursor of what to come. If you don’t believe me, please read Article 14.3 of the permit. It unambiguously lays down that “the cumulative amount of insurance and assurance shall be guided by an estimate of the sum of the reasonably credible costs. Such amount is not expected to include compensation for loss and damage to other parties and which are able to be pursued through civil proceedings.” In other words, other parties (individuals and businesses such as fisherfolks) would be on their own, fighting for their lives in a lopsided court battle against a behemoth. The legal trickery is that “credible and reasonable” damages could only be defined as the estimated difference between the existing environmental condition and the condition after the spill. Thus, it is impossible to arrive at this estimate, since there is no Government baseline showing the existing environmental condition.
An oil spill legislation provides for the processes for preparedness, response actions, and the identification of culpable parties and their liabilities in the event of a spill. Now, all of these could be provided for, and be embodied into the EPA Permits and the National Oil Spill Response Plan. So, a legislation is not necessary in these circumstances, but only serves as a camouflage to get out of the legal pickle and to please Routledge at our people’s expense.
What is most troubling, is that coupled with his manifestation of lack of knowledge and untruthfulness discussed later, the AG is openly behaving in Judas like fashion as Exxon’s AG and not Guyana’s. He joins Exxon, disloyally fighting with his last breath to defeat Guyana’s life-and-death needfulness for the UPCG, despite his own confessed words that Exxon has a bad international reputation and he will never defend them. He has gone way beyond defending, to joining them at the hip. My opinion therefore, is that he is not fit to serve as AG whose first duty is to protect the people of Guyana. We deserve much better!
By their rantings and ravings over recent judicial rulings as the Teachers and Exxon’s UPCG cases, Jagdeo and Nandlall leave no doubt of their proclivity for dictatorship rule. The VP attacks the Judge, fulminating that “it is presumptuous of a judge to criticize the President…..the people are the arbiter of conduct…. the judges are treading in murky waters”, and that rulings must be “predictable”. Nandlall has already broadcasted his intention for the legislation when he unabashedly declared that “the Government (not the courts), must determine the level of protection the country should receive for an oil spill”.
I have had the privilege of being associated with Attorneys personally and in my professional chain of command, locally and internationally, and could only conclude that Nandlall’s behaviour brings grave dishonour to this noble fraternity. In his recent NCN interview, all must be shocked by his empty-headedness, lies, disinformation and laziness to read; and, if he did read as he claims, then his comprehension. So much so, that patriotic Attorneys Melinda Janki and Khemraj Ramjattan had to take him to school on the basics of the law and the critical matter of the UPCG. As former Head of the EPA, who proudly created and wrote the UPCG into the EPA Permits as my patriotic duty, I also find it necessary to join our esteemed Attorneys Janki and Ramjattan in further schooling and correcting Nandlall’s lies, ignorance and disinformation, with unadulterated facts to save him further embarrassment of being a laughingstock.
Fact #1 – Nandlall flat out lied that there was no UPCG in the EPA permits under the Coalition. How is it possible that an AG who is fighting so vexedly to conjoin Exxon against the UPCG, not know that the UPCG was first put into the Liza 2 permit since 2019 under the Coalition? How could he be so incompetent to not know the background of a case that he is so ferociously appealing? Worse yet, even if one considers his false inference that it was the PPP/C which placed the UPCG into the permit, why is he now bizarrely going against his own permits? The fact is that after its first placing in the Liza 2 permit in 2019 under the Coalition, the UPCG was next put into the Payara permit which was written under my supervision, but signed by Acting Director Razack, while I was on leave in September 2020. The PPP/C Government then copied the exact UPCG clause into the revised Liza 1 permit in April 2022, and later into the Urau and Yellowtail permits, but now replaced it with the “credible and reasonable” deception in the Whiptail permit to support their oil spill legislation stunt.
Fact #2 – Nandlall and Jagdeo repeatedly lied that I “signed the worst permit (Liza 1), ever”. The fact is that it was signed by Acting Director Parsram in June 2017, 16 months before I arrived at the EPA and took immediate action to correct the shortfalls with my changes set forth in the Liza 2 permit, including the new clause for UPCG as described above. They rehired Mr. Parsram even though they condemned the Liza 1 permit he signed, as the worst ever; so, why do they expose and throw him under the bus like this? Also, I seem to be the ghost in the heads of Nandlall, Jagdeo, and Gail Teixeira, of recent vintage, who insanely lied before the UN Human Rights Commission that I was responsible for the 2016 Oil Contract and I hid the signing bonus; though, I was working for the US Government at the time, and only joined EPA in October 2018.
Fact #3 – Nandlall continues to spout his stupidness about “unlimited insurance”, despite being taught untold times that it is “unlimited parent company guarantee” and not his ignorant “unlimited insurance”. This means that the AG either does not read, he doesn’t understand what he reads, or he is flat out lying to cover-up for Exxon to the detriment of Guyana. For the AG’s sake, I will explain for the umpteenth time in its most simplistic form, the basics of the UPCG:
In mathematical parlance, Full Coverage = Insurance + Unlimited Parent Co. Guarantee (UPCG)
As succinctly explained by Judge Kissoon and the permits, regardless of the insurance value which is now a measly $600 million USD, the UPCG is only a letter of guarantee from the parent companies, that does not cost a single penny to the companies, but will cover any and all (unlimited) costs above the insurance. The oil spill legislation is only a camouflage to reduce the existing UPCG to some “credible and reasonable” amount to be determined by Exxon and expected to be capped at $2 Billion USD to satisfy Routledge’s demand, abetted by Jagdeo and Nandlall. I wish to remind that the BP Horizon spill in the Gulf costed $145 Billion USD.
Fact #4 – Starting with the Liza 2 permit signed in 2019, Exxon’s subsidiary (child) EMGL signed all of the Permits with the UPCG, confirming their legal agreement with it. Further, EMGL formally agreed that operation of Liza 2 will not commence as scheduled in 2022, nor any new permits granted until EPA approves the UPCG letter as to how the three companies Exxon, CNOOC and HESS will share the UPCG liabilities. We were at the final draft of that letter in August 2020, when I was sent on leave and the EPA young outstanding Attorney handling the matter was also terminated. Thereafter, Exxon with backing of the PPP/C Government refused to comply with the UPCG; thus, triggering the lawsuit and the overwhelmingly popular landmark decision by Judge Kissoon.
Fact #5 – Besides his foolishness about “unlimited insurance”, Nandlall’s and Jagdeo’s excuse for not having an UPCG, is that it will bankrupt Exxon, signifying that they are more distressed about Exxon’s bankruptcy, but obviously don’t care a hoot about the bankruptcy and environmental and health devastation of their own people and country.
Fact #6 – The UPCG is necessary, not only because there is no insurance of that size to cover an oil spill, but also because it is a strategy by companies like Exxon to create Limited Liability Company (LLCs) like EMGL to insulate them from all liabilities. Since EMGL signs all documents, it absolves Exxon of any liabilities. I repeat for emphasis that EMGL has little or no assets to cover an oil spill.
Fact #7 – Jagdeo continues to pedal his idiocy that EMGL has some kind of fictitious $20 Billion USD in assets which could be seized. The VP should have at least read the Contract to learn that all of EMGL’s “movable, permanent and fixed” assets belong to Guyana, and will be transferred “free of cost”, upon contract termination. Laughably put, he is touting that the Government seize its own assets. My incessant call is still unanswered for the VP to produce the $20 Billion USD list of assets that EMGL owns and don’t belong to Guyana.
Fact #8 – For the ill-informed Jagdeo and Nandlall who asserts that they have never heard of a UPCG, let them be educated that first, in countries such as the USA, all operations are registered in the names of, and run by the major companies themselves, and not by subsidiaries such as EMGL. Hence, the parent company takes on all liabilities. For instance, BP had to carry all liabilities in the Macondo spill. On the other hand, Shell Oil has been fighting an oil spill lawsuit brought by Nigerians, and Shell’s defense without a PCG, is that it is not responsible for its subsidiary under which the spill occurred. I would also advise that the VP and AG stop shooting from the hip and go read that similar UPCG exists in the UK, Russia and Greenland.
Fact #9 – The AG and VP are irresponsible not to care about the lessons of the relatively small spills in Peru and Tobago, without UPCG-like coverage. In the little 12,000 barrels spill in Peru, the Government had to seize the passports of the company’s Managers and file a lawsuit to recover cleanup costs in the $ Billions USD, followed by legislating new laws. In the 50,000 barrels Tobago spill, the Government is left holding the bag, still searching for the liable parties.
Fact #10 – The Government is recklessly fostering a triple whammy of (i) exceeding the EIA prescribed safe operating limits that increases the risks of a spill; (ii) tripled the deployment time for the capping stack to 9 days from the 3 days set by the Coalition, allowing for an extra 6-day gushing of oil into the ocean; and (iii) at the same time, opposes the UPCG for full clean-up, though enhancing the risk and quantity of a spill. Besides a well blow-out, there is a compounded risk of a spill from a ship plying the Caribbean fetching 1 million barrels of Guyana’s oil, daily.
Unfairly, the VP and AG have a public platform to peddle their lies and disinformation without a rebuttal and accountability. Therefore, since the taxpayers-owned NCN is obligated to provide equity of access to free speech for all of Guyana’s citizens, and to back up the Government’s claim of transparency, I kindly request that NCN affords me an interview of equal time afforded Mr. Nandlall; or, that NCN host a public debate between me and any individual or team of Government and Exxon, on matters related to the oil and gas contract and operations.
Respectfully,
Dr. Vincent Adams