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Nov 24, 2011

Oil Companies must put cash in environmental fund

Audrey Matura Shepherd

However, environmentalists are paying keen attention to Cabinet’s announcement of the establishment of the Environmental Common Fund (ECF).  The ECF is observed in Regulation fifteen (two) of the Petroleum Regulations. It states that current Production Sharing Agreements require contractors to contribute a percentage of the annual gross revenues to the ECF after a production commences.  According to the government release “The percentages range from zero point one percent for onshore PSAs to zero point five percent for deep offshore PSAs.” And though the key objective is to provide access to funds in case of a disaster brought on by the petroleum industry, is it enough to offset a catastrophe or even a minor oil spill? News Five spoke to Oceana Belize’s Vice President Audrey Matura Shepherd and she says no.

Audrey Matura Shepherd, Vice President, Oceana Belize

“We’ve been right all along; Oceana has always said there are regulations that are not being complied with. The mere fact that cabinet has now said that they have finally establish the environmental common fund shows that it was never in place although we had made official requests to find out these kind of information, we never got any. So we’ve been exonerated on that. Now on paper it looks good, but my reading of it, it’s not that good for several reasons for several reasons. One of them is that you’re establishing a fund to which the contractors would have had to have agreed to before. The contracts actually have the section 27.3 in which all of them say that they should be paying towards this fund. But they were never paid because the government never put in place the mechanism that it should be paid. So it wouldn’t seem to me that you could make it retroactive to the start of the contract. But the other reason that it is very concerning that it means nothing is that the percentage that the government is saying that they will be paying for the onshore one is point one percent. That is not even one percent; zero point one percent; it’s a tenth of a percent. And for the offshore one is point five percent; which is a little bit higher but it’s a fifth of a percent. I mean that’s ludicrous. And then you go to law and you read what it actually says and it says that this is a fund that will be held on trust only for environmental protection in the sense that if there is any disaster you have some money to go to. And that would seem good. I am not saying in principle it is not something good, but in practice what kills it now is that when you read the contracts; the contracts says that the contractors shall contribute, five-tenths of one percent—that is for Princess I’m reading—of the value of the annual gross production of crude oil and or natural gas produced and saved in each calendar year and not used or consumed in petroleum operations to a common fund to be held in trust by the government and managed for the sole purpose of indemnification against any or all environmental damages caused during the petroleum operation. So it is not like all the oil we get, you look at the value and you get point five percent out of it. You have a qualification and the qualification is that it has to be the oil that was not consumed in petroleum operation. So you have to look at what was consumed, what remains and from what remains then you calculate what the value is. So point five percent is not much. It si a start but it’s not much.”

Matura Shepherd also says that the Petroleum Act also calls for the formation of an Environmental Pollution Control Board. The establishment of that board would be a tangible safeguard for preserving the environment.

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4 Responses for “Oil Companies must put cash in environmental fund”

  1. Truth says:

    Nice point Ms. Shepherd, its a no win deal, bunch of bafoons in cabinet thats the main reason why we were rob from being compensated with a huge lump some of cash from the immediate oil production in Bze. If offshore drilling occur and cause havoc to the environment with are we going to do with that 0.15 deal not a damn thing…Get it right G.O.B

  2. Revolution says:

    I am now convinced that Audrey is a Legal DUNCE! If you read the contract it CLEARLY states that companies are to pay into the fund AFTER production commences. So what the hell is this woman talking about Government not being able to collect retroactive because the fund had not been set up. If Audrey would get off of her rear and do a little research at the Petroleum Dept she would see that BNE has been contributing their one tenth of a percent to the Common Fund since December 2005 when production started. So GOB doesn’t have to go after no one retroactively. If and when other companies make a discovery, they like wise will commence paying their share into the fund. Lawd man, even blind Jamesie could see this.
    Secondly, if she again would get out of her highly paid for Ocean Office and do some descent research on the industry she would see that oil is not being consumed or used in petroleum operations. Even world wide, oil companies would use only the gas for enery generation but the entire oil production is sold. So the Common Fund is getting and will always be getting the contribution from Gross production as no oil is being used or consumed in the operations. Lawd man, even duncey peter pan could could google and read this.
    I applaud the work of advocates, but the least an advocate can do is to educate themselves wholly about the subject matter they wish to argue or advocate for. The clock is beginning to click on your credibility Audrey. Wise up.

  3. Bdf says:

    You just one lawyer mrs Shepard .one lonely lamb against a bunch of wolfs,good luck.

  4. Bdf says:

    You just one lawyer mrs Shepard .one lonely lamb against a bunch of wolfs,good luck.That contract was written to favor the oil company and to take care of them .to he’ll with the environment(belizean lawyers motto)

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