By Chevy Devonish
On 24th June 2024, Guyana’s High Court ordered that section 94 (1) of the Petroleum Activities Act (PAA) requires that the Minister of Natural Resources (the Minister) and ExxonMobil Guyana Ltd. (ExxonMobil) be added to ongoing proceedings to compel the Environmental Protection Agency (EPA) to release insurance documents concerning the Liza Phase 2 Project.
This decision stems from applications filed by the Attorney General of Guyana (AG) on behalf of the Minister, and ExxonMobil to join an action filed by Sherlina Nageer (the Applicant) (Sherlina Nageer v. The Environmental Protection Agency Action No. 2024-HC-DEM-CIV-FDA-104 (“Nageer”)). The court has not determined whether the insurance documents should be released but will now proceed to consider that question.
Importantly, this decision has since been appealed, and it is also possible that an application will be made to stay the order of the High Court until the determination of the appeal.
The Government of Guyana (GoG) and ExxonMobil will be hoping this decision guarantees their inclusion in future legal actions concerning ExxonMobil’s petroleum operations.
While this is reasonable, this decision is not binding. Another High Court judge could interpret section 94 (1) of the PAA differently, as they are not bound by decisions of courts of concurrent jurisdiction.
The originating proceedings
The Applicant filed an action against the EPA to compel it to release copies of the “insurance policy” or “certificate of insurance” which ExxonMobil is required possess, and lodge with the EPA under the environmental permit granted by the EPA.
According to the Applicant, the EPA has confirmed that is in possession of ExxonMobil’s “Insurance and Affiliate Company Guarantee Agreement”, but declined to release the documents.
As a result, the Applicant filed a lawsuit asking the High Court to compel the EPA to release the Insurance and Affiliate Company Guarantee Agreement. (See paras 1 (B) and (C) of the FDA.).
The Applicant also asked the High Court for additional orders which could, if granted, cancel, prohibit the grant of, or dictate the terms of the environmental permit granted to ExxonMobil, and its partners in relation to the Liza Phase 2 Project.
Those orders included the following, which are found at paras 1 (D), (E), and (F) of the FDA:
“…where the Agency fails/refuses to provide a copy of the insurance policy or certificate of insurance…A Declaration that the Permit is cancelled in accordance with Condition 12.3 of the Permit; and
…where the Agency fails/refuses to provide evidence that the Permit Holder has complied with Condition 12.1 and 12.5 of the Permit…, An Order of Prohibition prohibiting the Agency from renewing the Permit or issuing a new environmental permit to the Permit Holder (its successors, assigns, and or affiliates)…;
AN ORDER OF PROHIBITION prohibiting the Agency from granting to the Permit Holder (its successors, assigns and/or Affiliates) any environmental permit which does not include all the provisions set out in Condition 12 of the Permit.”
Notices of Application by ExxonMobil and the GoG to be added as parties
ExxonMobil claimed an entitlement to be added as a party under section. 13 (1) of the Judicial Review Act Cap 3:06 (the JRA), r. 31.01 of the Supreme Court of Guyana Civil Procedure Rules 2016 (“the CPR”), and section 94 of the Petroleum Activities Act 2023 (the PAA 2023)
Sectiom 13 (1) of the JRA and r. 31.01 of the CPR allow a person with an interest in legal proceedings to apply to be added as a party.
Both ExxonMobil and the Minister claimed that section 94 (1) of the PAA entitled them to be added as parties when Nageer were filed.
Section 94 of the 2023 dictates that “in any action arising out of petroleum operations pursuant to this Act or related legislation that impacts the State or the interest of a licesee, the Minister and the licensee shall be named as a party as of right.”
ExxonMobil said its interest was clear given its financial investment in the Liza Phase 2 Project, and the fact that cancellation of the environmental permit “would cause massive and substantial financial loss…and would also have serious consequences for other projects ExxonMobil is committed to funding.”
The AG’s Chambers, on behalf of the Minister, argued that the orders asked for in Nageer could cause liability for the GoG, negatively impact anticipated revenue from royalties and the sale of Guyana’s share of profit oil, and negatively impact infrastructural and other projects to be financed from this expected revenue.
Counsel for the Applicant, however, argued that section 94 of the PAA only applies where legal action concerns “petroleum operations”, and where the court action arose out of the PAA 2023, neither of which was the case in the current proceedings.
The AG’s Chambers, however, argued that the PAA defines “petroleum operations” to include “environmental protection”, and that the grant, cancellation etc. of an environmental permit either by the EPA or by Court Order amounts to “environmental protection,” and therefore a “petroleum operation” under the PAA.
Ultimately, the High Court agreed with the arguments of the AG’s Chambers and ExxonMobil.
Justice Simone Morris-Ramlall said the Applicant seeks cancellation of the permit, without which Exxon would be impotent to operate Liza Phase 2, thereby giving ExxonMobil “…a direct interest in the outcome…” of the case, and an entitlement to be added as a party under section 13 (1) of the JRA and Part 31 of the CPR 2016. The Court also said that section 94 (1) of the PAA 2023 required ‘neither elucidation of recourse to any aid of statutory interpretation but the iteral rule to determine its intent, and that the intent was apparent, and mandatory.’
In its application to ExxonMobil, Justice Simone Morris-Ramlall said that Nageer is directly related to petroleum operations conducted by ExxonMobil as defined by the PAA, and the issues to be determined are likely to affect the interest of the company…”
Regarding the State, the Judge said that if the orders sought are granted, the interest of the government stands to be adversely affected. Not only does the government have an interest generated by the company, but [it] could be exposed to liability due to suspension or cessation of operations…section 94 (1) mandates that the Minister of Natural Resources be named as a party as the matter.”
Consequently, both ExxonMobil and The GoG were added as parties, and substantive action will continue as scheduled, unless halted by the CoA.
N.B.: All documents referenced and made available in this article are public records and are available from the Registry of the High Court of the Supreme Court.
About the Author
Chevy Devonish is a Senior Legal Advisor at the Attorney General’s Chambers, a Legal Advisor at the Ministry of Parliamentary Affairs and Governance, a lecturer at the University of Guyana, and has worked as a legislative analyst. He can be reached at [email protected]
