–CCJ rules; case marks first time regional court asked to decide an issue of direct concern to the protection, preservation of the environment

By Feona Morrison
IN a landmark decision, the Caribbean Court of Justice (CCJ) upheld a previous ruling by Chief Justice (ag) Roxane George-Wiltshire, SC, affirming that Hess Guyana Exploration and CNOOC Petroleum Guyana do not require separate petroleum production licences (PPL) from their co-venturer ExxonMobil Guyana to conduct oil production offshore in the Stabroek Block.

This ruling brings closure to political commentator and activist Ramon Gaskin’s bid to challenge the legality of the single PPL issued to ExxonMobil and its partners.
The Chief Justice concluded that because Hess and CNOOC were in a joint venture, their operations would be covered by ExxonMobil Guyana, the operator of the Stabroek Block.
Her ruling, which was upheld by the Guyana Court of Appeal, was further appealed to the CCJ.

ExxonMobil, along with its partners, Hess and CNOOC, operates the offshore 6.6 million-acre Stabroek Block. ExxonMobil Guyana holds a 45 per cent stake, followed by Hess Guyana Exploration with 30 per cent and CNOOC Nexen Petroleum Guyana with 25 per cent.
Gaskin had questioned the legality of the PPL, arguing that the two companies should be issued separate licences.

Only ExxonMobil had secured an environmental authorisation, and Gaskin contended that under the Environmental Protection Act, Hess and CNOCC required separate environmental permits before the two corporations could be given PPLs.
The activist was seeking an order of certiorari quashing the Minister of Natural Resources granting of a PPL to the oil companies, on the basis that the single PPL granted to ExxonMobil could not cover Hess and CNOOC.
He also sought the following remedies: An order of prohibition to prevent the minister from taking any further steps in exercising any further authority pursuant to the section 35 of the Petroleum (Exploration and Production) Act and an order prohibiting the minister from granting any PPL to Hess and CNOOC until environmental authorisations were issued to the companies.

EXXONMOBIL IS THE SOLE OPERATOR
In a ruling issued Thursday, CCJ Judge Winston Anderson said that the PPL was granted in this case because ExxonMobil was the project’s operator and was subject to extensive environmental obligations, which were extended to Hess and CNOOC through joint and several liability.
He reasoned that the grant of the licence to CNOOC and Hess did not render the licence invalid for four reasons.
Firstly, the judge said that the essential requirements under section 14 of the Environmental Protection Act to obtain an Environmental Permit had been satisfied with the grant of the environmental permit to the sole operator of the Liza 1 Project.
Secondly, he noted that it was consistent with international oil and gas industry practice that Exxon as operator functioned as representative of the joint venturers and that Hess and CNOOC be included within the licence as financial partners to secure financing.
According to him, the three companies shared liability for environmental harm guaranteed by their joint and separate liability. Lastly, Justice Anderson said that there was no increased risk of harm to the environment under either the precautionary principle or avoidance principle by the inclusion of Hess and CNOOC in the licence.

Interpreting the Environmental Protection Act as a whole and within the context of its objectives and constitutional underpinnings, Justice Anderson concluded that environmental authorisation must be given for the undertaking of a project and that the Environmental Protection Agency (EPA) must be convinced that a developer can fulfil their role and responsibilities and comply with the terms and conditions of the environmental permit.
As sole operator, he said ExxonMobil alone was able to comply with the obligations of the developer under the Environmental Protection Act. The judge concluded that there was no basis for finding that the Minister acted unlawfully and thus dismissed Gaskin’s appeal.
CCJ President Justice Adrian Saunders and CCJ Judge Maureen Rajnauth-Lee delivered concurring judgments. Denys Barrow and Andrew Burgess were the others judges who deliberated on the case. As Gaskin had acted as a public-spirited citizen intent on advancing the constitutional protection of the environment, no costs were awarded against him.

The CCJ said this appeal marked the first occasion on which the regional court has been asked to decide an issue of direct concern to the protection and preservation of the environment.
Seenath Jairam SC, and attorneys Melinda Janki, C V Satram, Mahendra Satram, Ron Motilall, KV Jairam and Sasha Sukhram represented Gaskin. Edward Luckhoo SC, Deputy Solicitor General Deborah Kumar, and attorney Eleanor Luckhoo defended the Natural Resources Minister.
Appearing for the added respondents Exxon, CNOOC and HESS were Andrew Pollard SC and attorney Nigel Hughes. Attorneys Sanjeev Datadin and Frances Carryl appeared for the EPA.
Exxon, CNOOC, and Hess formed a consortium to find and exploit petroleum from an area offshore Guyana known as the Stabroek Block. Pursuant to section 10 of the Petroleum (Exploration and Production) Act, the Government of Guyana, represented by the Minister responsible for petroleum, entered into a Petroleum Agreement with the consortium dated June 27, 2016.

The Petroleum Agreement was a production sharing agreement whose objective was the exploration for and production of petroleum in geographical areas covered by the Agreement. This 2016 Agreement, which followed the 1999 Petroleum Agreement between Guyana and Exxon, is a complex and detailed contractual document covering a number of matters.

On July 5, 2016, ExxonMobil applied to the EPA for an environmental permit for the project pursuant to the Environmental Protection Act.
ExxonMobil was required to conduct an environmental impact assessment. The environmental impact assessment also included a Revised Oil Spill Response Plan and Wildlife Response Plan dated June 1, 2017 which is subject to the terms and conditions of the environmental permit.
Then on June 1, 2017, the EPA approved ExxonMobil’s application and granted the company an environmental permit for the project.

On June 15, 2017, further to the agreements in the Petroleum Agreement, and pursuant to section 35 of the Petroleum (Exploration and Production) Act, the Minister of Natural Resources issued to Exxon, Hess, and CNOOC a licence in respect of the Liza 1 Petroleum Production Area.
The licence granted the consortium exclusive rights to carry on prospecting and production operations, sell or otherwise dispose of petroleum, and carry on other necessary works. Under the terms of the Petroleum Agreement and the licence, Exxon is the sole operator of the project.