Court of Appeal overturns ruling against ExxonMobil, EPA in environmental case

The Court of Appeal on Thursday unanimously ruled in favour of the Environmental Protection Agency (EPA) and ExxonMobil Guyana Limited, overturning a 2023 High Court judgment by Justice Sandil Kissoon in a case concerning the company’s environmental permit and financial assurance obligations.

Attorney Sanjeev Datadin, representing the EPA, said the court clarified that while ExxonMobil remains liable for environmental damage arising from its offshore petroleum operations, “unlimited liability” and financial assurance are distinct legal concepts.

The Court found that Justice Kissoon had erred in interpreting the permit’s financial provisions, stating that ExxonMobil was required to provide a guarantee of a fixed amount rather than unlimited coverage.

It further held that the EPA retains discretion under the Environmental Protection Act and the permit to accept a financial guarantee of a specified sum, and that the High Court had improperly substituted its own interpretation for that of the regulator.

The Court found no impropriety in the EPA and ExxonMobil negotiating a US$2 billion financial guarantee.

The appellate court also ruled that there was no evidentiary basis for the High Court’s conclusion that the insurance arrangement lodged by ExxonMobil matched those typically used in the international petroleum industry.

In 2023, Justice Kissoon had ruled that ExxonMobil was in breach of its environmental permit’s financial assurance requirements and that the EPA had failed to enforce compliance, finding that liability for environmental damage was uncapped. The ruling had sided with applicants Frederick Collins and Godfrey Whyte.

The Court of Appeal set aside the High Court orders in their entirety.