The World Bank’s support for governance reforms related to Guyana’s offshore oil development has been questioned in recent months, after research by Germany-based civil society organization (CSO) (CSO) Urgewald revealed that a law firm hired by the Bank under a technical assistance loan had long-standing links with ExxonMobil, one of the companies involved in the development of the Stabroek offshore oil field in Guyana .
According to in Urgewald, the law firm Hunton Andrews Kurth was contracted by the Guyanese government and paid $ 1.2 million by the World Bank to draft the country’s new oil laws. The company has, according to Urgewald, “represented ExxonMobil for around 40 years, including as a leading lobbyist.”
Following letters sent by Guyanese and international CSOs to World Bank President David Malpass and members of the Bank’s Board of Directors, and extensive coverage by international and local media, Huntington Andrews Kurth contacted Guyana-based newspaper Kaieteur news in June to state that he had informed the Guyanese government that he “would not represent the government on the matter.” This has yet to be confirmed by the Bank or the Guyanese government, Urgewald said.
The World Bank has undermined the rule of law in Guyana and must accept some responsibility for the current constitutional crisis in which an illegal government is fraudulently trying to retain power. The World Bank loaned money to a government that did not have the legal authority to borrow that money.Melinda Janki, international lawyer
Tip of the iceberg: Supply concerns are symptomatic of wider dismay over Bank’s role in Guyana’s oil development
The Bank has so far provided a total of $ 55 million to Guyana, consisting of a development policy of $ 35 million to lend approved in 2018 to reform the country’s financial sector in anticipation of the oil boom, and a $ 20 million technical assistance loan approved in 2019 to improve governance and management of Guyana’s oil and gas development (see Observer Summer 2018).
Technical assistance to lend includes support for an ‘update of Guyana’s legal and regulatory frameworks for O&G governance and oversight [oil and gas] sector. “Guyanese groups fear that this will dilute legal protections for the environment in Guyana, which are considered a regional gold standard and have inspired many elements of the Escazú Agreement – ie the Regional Agreement on Access to Information, Public Participation and Justice in Environmental Matters in Latin America and the Caribbean.
Despite the Bank’s goals to improve governance in Guyana, the country has descended into political chaos since accepting World Bank support. Following criticism of the ruling APNU-AFC coalition and their handling of the oil contract for the Stabroek oilfield, the coalition lost a vote of no confidence in December 2018 and became an unconstitutional government in September 2019 following their refusal to hold an election. A subsequent election in March 2020 favored the opposition PPP / C party, but this was contested by the outgoing APNU-AFC coalition, although they were unable to produce any evidence, in a move that was widely contested. sentenced by international observers.
“The World Bank has undermined the rule of law in Guyana and must accept some responsibility for the current constitutional crisis in which an illegal government is fraudulently trying to retain power,” said Melinda Janki, an international lawyer based in Guyana. “The World Bank loaned money to a government that had no legal authority to borrow that money. The World Bank authorized an individual to sign the financing agreement as Minister of Finance in direct violation of the Constitution. This is direct political interference in Guyana on the part of the World Bank.
The country’s political deterioration comes as Guyanese citizens return wrote to President Malpass in June to question the World Bank’s proposal that Guyana join the Zero-Gas Flaring initiative, which paradoxically would allow Exso, a subsidiary of Exxon, to continue to practice routine flaring, before finally shut down in 2030. Esso flared over 9 billion cubic feet of associated gas in just six months off Guyana, according to to civil society observers, even though its environmental permit prohibits routine flaring. “Exxon has not provided information on flaring or taken adequate steps to prevent this harmful and unnecessary practice,” said Nikki Reisch of the US-based CSO Center for International Environmental Law.