On May 17, 2025, Guyana’s National Assembly passed the Oil Pollution Prevention, Preparedness, Response and Responsibility Act 2025 (the Act).
The Act is the latest addition to the complex legislative framework regulating Guyana’s oil and gas sector, plugging the regulatory hole concerning liability, financial assurance, compensation, and penalties in cases of oil pollution.
Today, we will summarise the more crucial provisions of the Act, particularly sections 17-22 (on liability), sections 23-26 (on claims by affected persons), sections 27 (on financial responsibility), section 28 (on claims against sureties) and sections 31-37 (on penalties, including fines). These provisions all regulate and bind “responsible parties” operating in Guyana’s onshore, offshore and shipping sectors.
The term “responsible party” includes: i) owners or operators of vessels, ii) operators of offshore facilities and holders of an exploration, production or pipeline licence, iii) licence holders for deepwater ports, iv) operators or licensees of onshore facilities, and v) the immediate previous operator, owner, etc. of an abandoned or decommissioned facility or vessel.
These provisions are of particular interest, given that Guyana previously lacked legislation specifically contemplating and therefore regulating its oil and gas sector and its associated environmental risks.
Liability for Oil Pollution (Sections 17-22)
Under the new law, responsible parties are liable for all damage caused by an oil spill, including any removal costs, restoration costs, and any other costs arising from an oil spill (see section 17).
The damage referred to under section 17 includes, but is not limited to: i) loss of taxes, royalties, rents, fees or profit shares from injury, destruction or loss to real/personal property or natural resources, and ii) losses associated with damage to the environment. (see section 19).
Guyana, its agents or third parties may also recover removal costs related to an oil spill (see sections 18 and 22 of the Act).
Claims by persons affected by an Oil Spill (Sections 23-26)
Sections 23-26 allow claims to be filed by persons affected by an oil spill.
Section 24 (1) requires the subject Minister to appoint an “Oil Spill Incident Board of Inquiry” (the “BOI”) whenever there is a “spill incident”. Persons affected by an oil spill can file claims with the Board, which will then render a decision. This option is without prejudice to other civil legal remedies. The findings of the BOI are non-binding, unless the parties agree otherwise (See section 25 (2)).
Financial Responsibility (Section 27)
All responsible parties are required to obtain and provide evidence of financial assurance to the CDC (see Section 27(1)).
Financial assurance may take the form of: i) cash, ii) a letter of credit from a bank, iii) a guarantee from a person rated favourably by an internationally recognised credit rating agency, iv) or a performance bond (see section 27 (3) of the Act, and section 2 of the Environmental Protection Act, Cap 20:05, Laws of Guyana (“the EP Act”)).
The EPA determines the financial assurance amounts (see Section 31 of the EP Act).
Claims Against a Surety (Sections 28)
Section 28 enables claims against a surety that issued the financial security required under the Act. A surety is defined to mean any person, other than the responsible party, who provides evidence of financial responsibility for a responsible party.
This mechanism strengthens the enforceability of compensation claims, ensuring funds are accessible even if an operator becomes insolvent, fails or refuses to pay the claim, files for bankruptcy, or becomes insolvent. Similar provisions exist under the International Convention for Civil Liability for Oil Pollution Damage (CLC) 1992, and the Bunkers Convention, reflecting best practice to shield victims of pollution from financial shortfalls by the polluter.
Penalties for Non-Compliance (Sections 31-37)
Sections 31-37 establish penalties for contraventions of the Act. Any general breach of the act attracts a fine of up to GYD 10 million (See section 31). More specific acts like failing to submit relevant documents, keep appropriate records, or comply with Orders by the CDC will also attract fines of up to GYD 10 million (see section 32).
Furthermore, failure to provide financial assurance attracts administrative and financial penalties, including the withholding or revocation of any clearances under the Shipping Act, suspension of licences under the Petroleum Activities and the Maritime Administration Acts, and a fine of up to GYD 75,000,000 (See section 33).
Additionally, failure to report an oil spill or failure to respond to an oil spill attracts fines of up to GYD 1,000,000,000 and GYD 2,000,000,000, respectively (see sections 34 and 35 of the Act).
Further, directors, managers, other employees or agents found to have consented to any offence, or enabled an offence through neglect or connivance, will be jointly liable for the offence and subject to the same penalty.
It is worth stating that these are among the highest financial penalties in any of Guyana’s laws, even among modern penal legislation.
Compared to global standards, such as penalties under the U.S. Oil Pollution Act of 1990 or the EU’s Environmental Liability Directive, Guyana’s penalties are indeed significant, though, by comparison, lower in absolute monetary terms. Still, the lack of statutory caps on liability (as seen in section 17, for example) for environmental damage, unlike under the U.S. Oil Pollution Act of 1990, means that responsible parties in Guyana may ultimately face greater financial exposure, thereby strengthening the deterrent effect.
Conclusion
Guyana’s Act provides a modern legal framework consistent with international norms, particularly in imposing strict liability, requiring financial security, enabling direct claims, and prescribing penalties. While broadly aligned with instruments like the CLC 1992, certain aspects, particularly penalty levels, may warrant future recalibration to keep pace with evolving global standards and the scale of Guyana’s burgeoning oil industry. That said, the absence of caps on liability makes Guyana’s framework more stringent than others by comparison.
Ultimately, the Act strikes a balance between fostering industry growth and safeguarding Guyana’s marine and coastal environment, offering clarity and predictability for both operators and affected communities.
This column is co-authored by Frances Carryl, a seasoned attorney with advanced law degrees, extensive academic and practical experience in Corporate, Oil and Gas, and Environmental Law, and a solid background in legal research and environmental regulation.
