JUDGMENT DUE THURSDAY, JUNE 20

Chief Justice Kenneth Benjamin has reserved next Thursday, June 20, to announce whether he will grant the request by the Barrow administration to put a stay on the injunction granted in April by Supreme Court Justice Oswell Legall, barring the Minister responsible for petroleum, Dr. Joy Grant, her servants and agents from carrying out the provisions of six Production Sharing Agreements (PSAs) dated 25 May 2004 and 17 October 2007, mostly for offshore exploration.

The contracts were not granted under Grant’s tenure, but by her predecessors, former People’s United Party ministers Johnny Briceño in the case of the 2004 contract to Island Oil, and Florencio Marin, Jr., in the case of the five other concessions granted in 2007 to Miles Tropical Energy Limited, Petro Belize Company Limited, Princess Petroleum Limited, Providence Energy Belize Limited and Sol Oil Belize Limited. Only the PSAs for Princess and Providence were in effect at the time of the ruling, Government has said.

The Government’s attorney, Denys Barrow, SC, argued in court that the injunction binds the Government from carrying out its duties under the PSA but does not bind the companies, such as Princess Petroleum, which has a joint venture partner, Treaty Energy, currently undertaking petroleum exploration in southern Belize.

On Tuesday evening, the court completed its hearings on the application for a stay on the Legall injunction, and following the hearing, the press had a chance to interview the attorneys who had presented arguments to the Chief Justice.

Asked how confident he is that the court would grant his request to lift the injunction, Denys Barrow, SC, told us: “There is a thing called litigation risk which attaches, which is involved in every litigation you do, and there are always those cases where you were 99% sure you would win and you end up losing because there is something you did not look at; and sometimes the opposite happens: you think that you have [a] really weak case and then some point develops in argument and that tilts the balance.”

Barrow said that his belief in the merits of the application continue to be as strong as before, but restrained himself from trying to predict the outcome of the hearing.

Since Chief Justice Benjamin plans to render his decision before this session of the Court of Appeal ends on June 28, Barrow noted that if the stay isn’t granted by the Chief Justice, it is open to the Government to apply anew to the Court of Appeal—which will hear the appeal on the Legall decision—for the stay on the Legall injunction.

In court, Barrow told the Chief Justice that it is entirely open to a petroleum contractor or a pressure group to bring a separate action for judicial review and an order of mandamus, asking the court to compel the minister to perform her duties stipulated in the law, even while the injunction exists barring her from acting under the production sharing agreements.

The attorney said that the court denied the request of Oceana to quash the contract, which means that the companies can continue to conduct petroleum explorations legally, but due to the injunction against the minister, she and other government officials are barred from executing their duties under the PSA, which range from receiving reports from the companies to ensuring environmental compliance.

“If the contract still exists because it is ‘unquashed’ then it is enforceable as between the contract holder and the Government of Belize, so that if the contract holder wants to dig an exploratory well, makes application to the Government to do so and the Government declines to consider that application then don’t they have rights as well under the contract?” Barrow questioned.

He said that the company can go to court to ask them to compel Government to give their application the due consideration to which they are entitled and to make a fair decision regardless of what has taken place between Government and Oceana.

Also, said Barrow, in the scenario where a contractor may build a road that causes gross environmental damage, such as the destruction of habitat, an environmental group in the area is entitled to go to the court to demand that Government regulates, and they can ask the court to order the Government to regulate, Barrow said.

Audrey Matura-Shepherd, Vice President of Oceana in Belize, the main claimant in the case, told the press, in response to Barrow’s statement, that an order of mandamus compelling the Government to act can only be based on a valid contract.

“So you can’t go and mandate any government entity to go and enforce an illegal contract,” she asserted, adding the ruling of Justice Legall made the clear declaration that all six PSAs are “unlawful, null and void.”

According to Matura-Shepherd, the court also stated that Environmental Impact Assessments (EIAs) must also be done before contracts are issued for petroleum exploration.

The Barrow administration takes a different view, and deems that declaration by Legall to be “egregiously wrong.” Prime Minister Dean Barrow and his brother, Denys Barrow, have both told the media that the injunction did not bind the company, and neither did Justice Legall issue an order certiorari, quashing the petroleum contracts.

However, attorney for Oceana, Godfrey Smith, SC, told the court that under section 8 of the Petroleum Act, there can be no permission to explore for petroleum in Belize without a valid contract – and the Legall ruling has already declared the contracts to be unlawful, null and void – which remains the case until and unless a higher court declares otherwise.

For the contractors to continue to operate under the contracts that have been declared unlawful, null and void would be to diminish respect for the court’s orders, to undermine the authority of the court and to subvert the rule of law, Smith told the court.
“It’s unfortunate that at all costs, it seems to me that they want to be able to do what they want to do, and convince the people of this country that that’s how it should be, and that’s not how it is,” Matura-Shepherd said, responding to the stance by the Government and the company that continuing works on the PSAs is legal, because Legall did not issue a quashing order.

She noted that Treaty, joint venture partner of Princess Petroleum, is drilling the San Juan #3 well and reports to her are that they have not found any oil, but they are keeping that secret, she said, because it will contradict their claim, in alleging that the injunction will do irreparable harm, that there are 2.5 billion barrels of oil that could be extracted.

In the hearings, Government made the case that continuing the injunction is harmful to the national interest, because the Government cannot exercise its oversight function in relation to operations being done by Princess Petroleum and Providence Energy for as long as the injunction is in place. Barrow also contended that Government stands to lose revenue in the region of $5 million over 6 months because of the delay the injunction would cause.

However, Smith said that Barrow, who pointed to figures appearing in the national budget, provided no tangible evidence to support the claim that such revenue would actually be lost. All he had was a forecast.

This point was a major one in the case because in order to get the court to grant a stay, the Government had to show that its case has a good chance of success on appeal and that keeping the injunction in place would cause them irreparable damage.

“It is not sufficient to merely point to some expected oil discovery that could possibly lead to production and possibly lead to revenue – that is what irreparable harm means… We believe that the starting point is, you have to show that there is some confirmation that the oil wells; that the wells on which the government and Treaty and Providence are basing this application [on] are confirmed discoveries. Other than that, it is just rank speculation,” Smith told the press.

Both parties—whose debate centered on economic and environmental fronts—contend they are acting in the national interest.

Smith told the media that, “In our view, all the government has done is to come to court and invoked like some kind of magical incantation the national interest: ‘If you don’t stay this injunction, there’ll be huge economic ramifications.’ We did not say that there may not be oil production that could possibly lead to development. We are simply saying, ‘Look, this business of national interest has two aspects: It has the economic aspect – which nobody can deny – but equally it has…an environmental aspect.’”

He went on to say, “It’s not Oceana or the Coalition or COLA who drafted that wide-sweeping range of Environmental Protection Act and Regulations, and other related legislation to protect the environment; it’s the Legislature of Belize.

“So when the Executive – the Government of Belize – stands up in court and says, ‘Well, it’s a matter of national interest and you’re keeping back development, they should bear in mind that there is a third, an equal arm of government – the Legislature, that in its legislative wisdom has come up with this legislation which doesn’t say there can’t be development, or oil production or exploration but simply that you must comply with what is provided in that slew of environmental legislation before you go on to do these things.”

Antoinette Moore, SC, attorney for the Belize Coalition to Save our Natural Heritage, which is an interested party in the case, said, “We wanted the court to know that although offshore protected areas are of concern to the Coalition, onshore protected areas are also of great concern. The Payne Creek National Park is almost fully outlined now by Princess’s concession for oil drilling and there are obvious ecological and environmental concerns about oil exploration and drilling in and around a national park, which is a protected area. So the Coalition wanted at least the court to be aware of their particular concern in that regard.”

TIDE’s James Foley deposed in an affidavit that irreparable damage could be done to the protected area, and the Coalition wanted that evidence to be considered before a decision is made on the case, Moore indicated.

“We will see how the decision goes. We are very confident in the system. We have always said, ‘We come to the courts to get a ruling,’ and we know that if we are not satisfied with a decision what do we do? We go to a higher court. We are not going to be rogue. We lead by example where the Government has failed to,” Matura-Shepherd told the press.

Moore said that, in her view, the Legall decision does have implications for works also being undertaken by US Capital in Toledo, and we should expect a move shortly from the Sarstoon Temash Institute for Indigenous Management (SATIIM) in challenging works on that front.