The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Environmental activists yesterday pledged to challenge whether Bahamas Petroleum Company's (BPC) agreements are legally watertight after remarks by the Prime Minister that were "music to our ears".

Fred Smith QC, the Callenders & Co attorney and partner, told Tribune Business that Dr Hubert Minnis' assertion his administration was "saddled with an agreement.... we could not get out of" will "certainly open up a new ground" in the Judicial Review bid to halt BPC's exploration plans.

The outspoken attorney, who is representing Waterkeepers Bahamas and the Coalition to Protect Clifton Bay (Save the Bays), said he now plans to apply for full disclosure of the legal advice provided to the Government over BPC's seemingly unbreakable licences as part of legal "discovery" associated with the Judicial Review.

This involves both sides exchanging documents relevant to the case, and Mr Smith promised he and his clients will also seek full disclosure of BPC's licence agreements and associated commercial terms as part of the court hearing.

These details have never been fully disclosed by either BPC or the Government, with the Callenders & Co attorney and partner suggesting that the intensifying battle over exploratory oil drilling in Bahamian waters has "more points than a porcupine".

Describing himself and his clients as "very excited" over Dr Minnis' Friday assertion that he is "totally against oil drilling in our waters", Mr Smith told this newspaper: "To hear the Prime Minister, who is the heart of the Government, say he is against oil drilling is music to our ears. It is an exquisite expression of transparent fresh air."

He argued that Dr Minnis' comments "unequivocally bolster" the testimony by Joseph Darville, Save the Bays' executive chairman, regarding the May 2018 meeting in which Romauld Ferreira, minister of the environment and housing, told environmental groups that the Government "would not support or approve licences for oil drilling in The Bahamas".

Reiterating that those present were never told BPC had applied for Environmental Authorisation (EA) for its Perseverance One well less than one month before, Mr Smith added of the Prime Minister's stance: "This will certainly be a new ground in the Judicial Review. Frankly, we don't know who advised the Prime Minister or the Government.

"According to him, he was advised that he was bound by these contracts. This is a waiver of attorney/client privilege that brings it strictly within judicial determination; the credibility and strength of this advice.

"Who did he get advice from? When did he get the advice, and what was the advice? We will be seeking disclosure of what legal advice the Government got. This is fundamental: Whether the agreements are binding or not. We will be applying for discovery."

The Prime Minister did not explain how, or why, the Government's agreements with BPC are so legally watertight that it cannot extricate itself from them should it choose to do so. This position has been echoed previously by both Carl Bethel QC, the attorney general, and Mr Ferreira, who have also argued that the Government's hands have been bound by the former Christie administration.

The upcoming Judicial Review case provides the first opportunity to test this argument, which is likely based on legal advice that the Government would have to pay BPC millions of dollars if it failed to renew its licences or walked away from their agreements without justification if the company had fulfilled its side of the bargain.

Many Bahamians are likely to be sceptical about the Prime Minister's assertion, especially since the Minnis administration has had several opportunities not to renew BPC's licences if it was so opposed to oil drilling in Bahamian waters.

A review of the record, based on BPC's stock market filings, discloses that the former Christie administration extended the company's licences for five drilling fields for a further year less than two months before the general election on March 21, 2017.

That extended them until April 2018, when the oil explorer submitted its Environmental Authorisation (EA) application to the Government. The trail regarding who has approved the licence extensions beyond April 2018 has already become murky, though.

BPC, in its June 2017 results announcement, besides confirming the March 21, 2017, extension, also adds that the time to perform its oil drilling obligations has been pushed out for a further year to June 2019. It does not make clear whether this came from the Minnis or Christie administrations, though.

What is clear is that the present government extended BPC's licences and obligations from June 2019 to year-end 2020, and granted further extensions through to mid-June 2021 on the basis that COVID-19 had disrupted drilling plans.

Mr Smith, meanwhile, said he and his clients were "seeking a date from the court this week as early as possible" to hear their Judicial Review application and "stay" the drilling of BPC's Perseverance One well upon which drilling is supposed to start six days from now.

"We do hope that the attorney general, Carl Bethel, will not obstruct, delay or obfuscate these proceedings as his office has traditionally done with applications to strike out, applications for security for costs, refusal to make discovery," he told Tribune Business.

"This is the time to make good with the Bahamian people and to shine a light on this BPC transaction." Mr Smith said BPC's licences, licence renewals and commercial terms will also be part of his clients' discovery and disclosure applications.

"It is our contention that both the PLP and FNM have miserably failed at every stage to engage the Bahamian public in a transparent fashion with what is happening with this project," he blasted. "The entire risk is being borne by the Bahamian people and the Bahamian environment.

"What protections do the Bahamian people have? We don't have the technical resources, the know how and the financial resources... We don't know anything about drilling for oil in The Bahamas. Our government has been playing with fire, and not at the risk of BPC."