Counsel claims $5 mil in losses could accrue because of delay: Oceana says, show us the evidence

Chief Justice Kenneth Benjamin on Wednesday began hearings on a case filed by the Government of Belize for a stay of execution on a Supreme Court injunction granted in April by Justice Oswell Legall, which Government contends binds them—but not the petroleum companies—from pursuing works under production sharing agreements (PSAs) that the court had ruled to be “unlawful, null, and void.”

Government attorney, Denys Barrow, SC, was the first to make his submission to the court Wednesday. He told the court that the injunction should be lifted because (1) the appeal filed by the Government will likely be successful, and (2) not lifting the injunction will cause irreparable harm to the Government that Oceana, the claimant in the Supreme Court action, will not rectify.

By law, Barrow is required to successfully demonstrate these two points before he can get the court to lift the injunction Legall had imposed on the Government.

The Government won the first round in this case Wednesday morning, when the court ruled that it would not accept an application by Oceana to admit expert testimony from Susan Harvey of Harvey Consultants, USA, in response to claims made by two petroleum companies – Princess Petroleum and Providence Energy Limited – in letters written to the Government and exhibited in the fourth affidavit of Andre Cho, the Director of Petroleum and Geology.

“Oceana is a very contentious, very argumentative set of people and the short point is that they filed a major, weighty expert’s report when there was no need for it,” Barrow commented to the press.

Barrow proposed to the court that those letters, and references made to them in Cho’s affidavit, should be disregarded; however, Barrow said, those letters were submitted to the court for it to see “the pressures upon the government.”

Chief Justice Benjamin said, in explaining his decision, that to admit the expert evidence for Oceana would be to invite a mini-trial, which he does not think is acceptable in an application for a stay on an injunction.

Asked whether the decision to strike out part of the evidence first presented to the court in Cho’s affidavit was because of fears that the expert evidence could threaten the Government’s position, Barrow said: “I think that’s really fanciful!”

Government’s central argument in the case is that the companies have not been restrained via injunction from continuing their works, but the Government has been restrained from doing its job in monitoring them and ensuring that they exercise legal oversight over their operations. That, he told the press, is against the national interest.

Another central point Barrow made is that, should the injunction persist, there would be irreparable harm, such as the loss of an estimated $5 million of revenues if petroleum exploration were to be delayed by 6 months, pending the outcome of an appeal.

“If the argument is an economic one that he wants to make, disclose your evidence because up to today, even though we’ve asked under the Freedom of Information Act and even though they’re mentioning in court about some bank guarantee, up to today we’ve not seen if those bank guarantees exist, although the law requires it,” said Oceana (Belize) Vice President Audrey Matura-Shepherd, in speaking with the press after the hearing.

“If we are going to talk about money, I can tell you about money. If indeed the oil industry is going to provide the money that they say they will, why would the Government have gone and in 2009 sign[ed] a new agreement with Providence? Instead of Providence now giving us 15% of the sharing [of production revenues] should oil be found, this Government signed an agreement where Providence will only give 7.5%. So if you’re talking about revenue and you really wanted us to discuss revenue, they should have disclosed that in evidence so that we bring all the evidence… However, the good thing is that the contracts are in evidence already and our attorney could refer to that,” Matura-Shepherd told the press.

“He [Barrow] said he disclosed the letters [from the oil companies] to show the extent of the pressure from the oil companies; so what happened to the pressure from the country and the people of Belize who are saying, (1) you need to obey the law and (2) if indeed the industry is going to benefit us, why not do it the right way?” she added.

Barrow told the court and the press that Treaty Energy Corporation, joint venture partner of Princess Petroleum, is “continuing its work lawfully” but they are not being monitored by the Government.

Treaty had reported in early May that, “Due to the Supreme Court ruling, Treaty Belize Energy temporarily suspended its drilling efforts on the San Juan #3. Treaty wanted to consult with its Legal Counsel in Belize and wait for the Government of Belize to issue a statement.

“On May 5, 2013, Prime Minister Barrow made statements to local media regarding the Supreme Court ruling. Based on the legal opinion Treaty Energy received from Princess Petroleum’s legal counsel and the statement made by Prime Minister Barrow, Treaty has made the decision to recommence drilling of the San Juan #3 well.”

Barrow said that Justice Legall didn’t hear any argument about the injunction, and Oceana never asked for one. What Oceana had asked for was a quashing order, but the judge did not acquiesce, and the judge couldn’t, said Barrow, because the oil companies were not a party to the suit.
“You can’t quash a contract between two parties when only one party is before the court,” Barrow told the press.

In explaining why the oil companies were not joined in the suit, Matura-Shepherd told our newspaper that Justice Legall ensured that the oil companies were served a request to ask them to join as interested parties, but they declined to be a part of the suit.

Barrow contends that because the injunction was against the Government and not against the oil companies, “it means that these oil companies can do what they want without supervision, without monitoring, without reporting, without being responsible…”

Dr. Colin Young, Chief Executive Officer in the Ministry of Natural Resources, told the press that the injunction puts Government in “an untenable position” because it “injuncts” the minister and her agents, but it does not “injunct” the company. He said that Government is unable to say what the extent of the company’s work has been since the Legall ruling.

Asked why Government has not asked the oil company to hold off works until the hearing is concluded, Young said the companies have obligations to their own interests and to their shareholders, and because the judgment did not “injunct” the company, the company can continue works.

Matura-Shepherd told the media that what is harming the national interest is the way things have been proceeding: “To have a government that doesn’t allow the oil companies to respect a court ruling – remember the court said that these PSAs are unlawful, null, and void—that’s harming national interest… we would be seen as a country not obeying the rule of law.”

She added that, “It would also harm national interest to say, go ahead, drill all you want but not comply with the regulations which were flagged in the court ruling.”

CJ Benjamin has set next Tuesday, June 11, 2013, to resume hearing Oceana’s attorney, Godfrey Smith, SC, who also acts for Citizens Organized for Liberty through Action (COLA), an interested party in the case.

Meanwhile, the Belize Coalition to Save Our Natural Heritage, the other interested party, is being represented by Antoinette Moore, SC.