CCJ allows govt to join fight against unlimited parent company guarantee for oil spills

In a landmark decision, the Caribbean Court of Justice (CCJ) has overturned the ruling of Guyana’s Court of Appeal, granting the government the right to intervene in the legal battle alongside ExxonMobil and the Environmental Protection Agency (EPA) concerning an unlimited parent company guarantee for potential oil spills.

A parental guarantee, whether limited or unlimited, is a form of assurance provided by a parent company to support the obligations or liabilities of its subsidiary or affiliate

The ruling, delivered on Tuesday by Justices A. Saunders, W. Anderson, and M. Rajnauth-Lee, marks a significant turn in a legal saga that began when Guyana’s High Court initially sided with public interest litigants, Godfrey Whyte and Frederick Collins, on May 3, 2023.

The High Court had mandated ExxonMobil Guyana Limited (EMGL), formerly Esso Exploration and Production Guyana Limited (EEPGL), to provide an unlimited parent company guarantee to shield the nation from the financial burdens of an oil spill.

High Court Judge Sandil Kissoon had ordered, among other things, that an ‘unlimited’ parent guarantee be provided by ExxonMobil Guyana, based on his examination of the permit.

If this is not provided in a specified time, the environmental permit will be cancelled, bringing a halt to the project currently producing 150,000 barrels of oil per day (bpd).

Both the EPA and ExxonMobil appealed Justice Kissoon’s ruling, with the Attorney General, Mohabir Anil Nandlall seeking to join the appeal on May 12, 2023.

However, the AG’s application was denied on December 19, 2023. Undeterred, on January 31, 2024, the AG petitioned the CCJ to contest the decision of the Court of Appeal.

In a statement during his weekly programme, ‘Issues in the News,’ Tuesday evening, the AG expressed satisfaction with the CCJ’s decision, emphasising the importance of safeguarding public interests in major agreements such as the 2016 Production Sharing Agreement (PSA) with ExxonMobil, which plays a pivotal role in Guyana’s economic landscape.

The written ruling of the CCJ dictates the addition of the government as a party to Civil Appeal No. 67 of 2023.

The AG argued that since the government is a signatory to the PSA with ExxonMobil, it has a vested interest in the outcome of the appeal.

AG Nandlall underscored the significance of the government’s involvement in protecting public interests, particularly in agreements of such magnitude that have profound implications for the nation’s finances and development initiatives.

“The role of the attorney general is to represent the public good…With the government’s inclusion in this legal battle, we aim to ensure that the interests of the people of Guyana are upheld,” Nandlall asserted.

The government now intends to petition the Appellate Court for inclusion in the ongoing proceedings, signaling its determination to actively participate in shaping the outcome of this crucial legal dispute.

As the case unfolds, all eyes are on the courts as they navigate the complex intersection of environmental protection, corporate responsibility, and national interests.