The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Oil exploration opponents yesterday admitted they will have to halt their challenge to Bahamas Petroleum Company’s (BPC) drilling approvals if it succeeds with its $200,000 “security for costs” demand.

Joe Darville, executive chairman of Save the Bays, and secretary of Waterkeepers Bahamas, the two environmental groups behind the Judicial Review, conceded that they lack “sufficient liquid assets” to pay this sum should the Supreme Court grant BPC’s request.

“The applicants have succeeded in fundraising to begin this action, and are actively seeking further funding to allow them to continue the action to trial,” Mr Darville, referring to Save the Bays and Waterkeepers Bahamas, said.

“Notwithstanding that Save the Bays has substantial assets in the form of the costs certificates detailed, neither Waterkeepers Bahamas nor Save the Bays have sufficient liquid assets currently nor are they likely to be able to raise the same before the upcoming trial) to set $200,000 aside by way of security for costs.

“I can confirm that if the security for costs application succeeds, this action will certainly have to be stayed because Waterkeepers Bahamas and Save the Bays will be unable to raise sufficient sums by that date to both fund its continuation of the action and provide a significant sum in security for costs.”

So-called “security for costs”, which require that a party to a Supreme Court case lodge a performance bond in escrow to cover the other side’s legal fees, has been increasingly employed as a procedural tactic or weapon in a bid to effectively price-out public interest litigants from the justice system before the merits of their action are heard.

Given that BPC earlier this week abandoned and plugged its Perseverance One exploratory well, and announced no commercial oil quantities had been found, there was some doubt over whether the oil explorer would persist with its “security for costs” demand and opposition to the Judicial Review action as it has already completed what it set out to achieve.

The filing of Mr Darville’s affidavit yesterday suggests it is persisting, with the environmental activists especially keen for the Judicial Review’s merits to be heard so that the court can provide clear guidance on which permits and approvals future oil wells must obtain, and the processes they must follow.

Among the most critical issues to be determined are whether oil wells need to obtain site plan approval under the Planning and Subdivisions Act, and an excavation permit under the Conservation and Protection of the Physical Landscape of The Bahamas Act, as well as the application of merchant shipping laws and international pollution treaties.

Meanwhile, the “costs certificates” referred to by Mr Darville represent previous legal expenses awarded to Save the Bays by the Supreme Court over previous Judicial Review challenges involving accused fashion designer, Peter Nygard, and his associates.

“Save the Bays has an unblemished record over the last almost eight years in bringing successful Judicial Review proceedings against Government and public agencies for their actions, inaction and decisions in relation to unregulated development in The Bahamas. This is a matter of public record,” Mr Darville alleged.

“The costs awarded to Save the Bays in the actions listed..... amount to many millions of dollars. Some bills have been taxed and paid, some remain untaxed and others have been taxed and are subject to negotiations for payment or enforcement proceedings.

“There are many separate costs orders against government respondents, Peter Nygard and attorney Keod Smith in the actions listed that remain unpaid. Peter Nygard remains indebted to Save the Bays on a number of Certificates of Costs referenced by action numbers. STB is in the process of executing for payment thereof.”

A realtor’s valuation appraisal attached to Mr Darville’s affidavit valued Nygard Cay, the fashion designer’s Lyford Cay home, at $14m. Mr Darville alleged that Mr Nygard still owes Save the Bays some $411,660 in unpaid legal bills.

“Keod Smith, a senior member of the Bar of The Bahamas, likewise remains indebted to Save the Bays on two certificates of taxation of costs,” Mr Darville added. “Save the Bays is in the process of executing for payment thereof. Copies of the two certificates for $111,500 and $263,000, totalling $374,500 with interest accruing at the statutory rate, are exhibited.

He said enforcement proceedings have also been launched against the Government to collect $1.387m in taxed legal costs awarded over Judicial Review challenges involving unregulated development at Nygard Cay.

Meanwhile, environmental activists yesterday called for “independent verification” that BPC’s exploratory well has been properly plugged and there is no possibility of “leakages”.

Casuarina McKinney-Lambert, the Bahamas Reef Environment Educational Foundation (BREEF) executive director, told Tribune Business: “When will we get an independent confirmation that the well has been capped?”

Citing scientific reports expressing concern over the number of oil wells that need to be plugged and abandoned, she said: “We are very concerned about the well plugging that is reportedly being undertaken before the [BPC] well is abandoned.

“Numerous other wells around the world have leaked after being inadequately plugged and abandoned. There should be independent verification that this is done properly, and that there is no leakage of methane, benzene, nitrogen oxides, carbon dioxide or other substances.

“What sort of follow-up monitoring will take place? This is one of the reasons why we were repeatedly asking about the terms of the insurance, including the duration of the policy and if there are any exclusions to the coverage. Would the insurance cover a leaking well? Or would this be the responsibility of the contractors?”