The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Oil exploration opponents yesterday hailed growing international pressure for Bahamas Petroleum Company (BPC) to show it has sufficient insurance to cover any pollution clean-up costs.

Casuarina McKinney-Lambert, the Bahamas Reef Environment Educational Foundation (BREEF) executive director, told Tribune Business that the intervention by the Insure Our Future pressure group showed that BPC’s exploratory drilling has become “truly a global issue and people around the world are watching what we do.

“The Bahamian people have a right to know the amount of coverage in the event of disaster, duration of the policy and name of the insurer that BPC has procured for this oil drilling venture. And unsubstantiated claim of insurance ‘in excess of government requirements’ is not sufficient to relive the concern of thousands of Bahamians whose livelihoods depend on a clean marine environment.”

She spoke out after Insure Our Future, which lobbies the global insurance industry to stop underwriting and providing coverage for activities that are harmful to climate change, said BPC could simply eliminate all doubts by producing the insurance certificates related to coverage for its Perseverance One well.

The group also pointed to the contradictory statements issued by Lloyds of London, the insurance market where BPC’s coverage is said to be placed, which initially said it had “no record” of any policy and then subsequently refused to comment further.

Insure Our Future added that if any Lloyds syndicate was providing coverage to BPC it ran contrary to statements in the market’s environmental and social governance policy (ESG), which pledged “responsible underwriting and investment to help accelerate society’s transition from fossil fuel dependency, towards renewable energy sources”.

Tribune Business, too, attempted to obtain confirmation from Aon, the broker BPC used to place its coverage, but a spokesperson was unable to respond before press time last night.

“John Neal (Lloyd’s chief executive and/or Bruce Carnegie-Brown, the chair of Lloyd’s Council, have a clear moral responsibility to clarify whether or not any aspect of this exploratory oil drilling in The Bahamas is being insured in the Lloyd’s market,” the Insure Our Future group said in a statement.

“If Lloyd’s is insuring BPC, it needs to explain its previous statements and how insuring this project fits with the vision of ‘responsible underwriting and investment to help accelerate society’s transition from fossil fuel dependency, towards renewable energy sources’, which it stated in its new ESG policy.”

As for BPC, the group said: “The Bahamas Petroleum Company (BPC) openly contradicts Lloyd’s statement, yet refuses to publish the evidence that it actually has insurance coverage with one or more Lloyd’s syndicates.

“Citizens, other affected companies and representative organisations surely have a right to know and a right to expect to be provided with evidence that insurance is in place. The bluster and insults traded by BPC are no substitute for evidence. BPC should simply produce the certificate of insurance now.”

The “bluster” comment is a reference to assertions by Simon Potter, BPC’s chief executive, who previously blasted its opponents for “deliberate and gross misrepresentation” over suggestions its exploratory well lacks adequate insurance coverage.

In a statement to Tribune Business, he accused environmental activists of making “baseless” allegations that expose “a near complete lack of understanding and continued naivety” over how business in The Bahamas and internationally is conducted.

Mr Potter hit out after the Our Islands, Our Future coalition, which includes the two groups behind the Judicial Review challenge to the permits issued for BPC’s Perseverance One well, said its checks with the Lloyds of London insurance market produced no evidence that the oil explorer possesses sufficient insurance to cover the cost associated with oil pollution clean-up should an accident occur.

The group said it had contacted a senior Lloyds executive, who it named as Michaele Hawkins, its head of responsible business, who responded on behalf of the insurance market’s chief executive, M Neal, by saying in regard to BPC: “At present we don’t have any record that this risk is being underwritten in the Lloyd’s market.”

Our Islands, Our Future said it subsequently wrote again to Lloyd’s executives, submitting BPC’s public statements on the issue and requesting clarification, only to receive a January 14 reply that said: “Thanks for your follow up e-mail. We won’t be making any further comment on this particular project.”

The coalition seized on the responses to argue that serious questions have been raised over whether BPC has sufficient insurance coverage to finance oil spill remediation and protect the Bahamian environment, as it engaged the oil explorer in their latest verbal sparring on the margins of the Judicial Review action that is now before the Supreme Court.

However, Mr Potter said Lloyd’s executives would not possess details on every insurance contract underwritten by the syndicates it facilitates via the structure of a formalised market.

“As has previously been disclosed publicly by BPC, in accordance with its strict legal requirements the company has secured all insurances to be procured by a prudent operator for the Perseverance One well operations, and as stipulated by the Government of The Bahamas,” the BPC chief responded.

“Therefore, the statement from Our Islands, Our Future in relation to BPC’s insurance policies is baseless and entirely incorrect. As with all insurance contracts, there exists normal business confidentiality provisions, and whilst the details of BPC’s specific contracts have been provided to the Government of The Bahamas, they are otherwise subject to commercial confidentiality obligations.”

Mr Potter continued: “I would note further that Lloyd’s of London is the world’s leading insurance market, comprised of multiple risk-writing syndicates. It is not a company or similar such organisation where any one individual can attest to speak for Lloyd’s as a whole, but is rather a facilitator of insurance transactions on behalf of individual Lloyd’s syndicates.

“As such, the corporation of Lloyd’s does not have details of individual contracts underwritten by its syndicates. Thus choosing to represent an individual as speaking for the whole of the Lloyd’[s syndication market is yet another deliberate and gross misrepresentation of basic facts by Our Islands, Our Future, evidencing a near complete lack of understanding and continued naivety as to how businesses operating in The Bahamas (and internationally) actually operate.”