World Bank under fire over hiring of law firm with Exxon ties for Energy Dep’t

-German environmental group says decision undermines good governance

German non-profit environmental and human rights organisation Urgewald has criticised the World Bank’s decision to fund technical assistance for Guyana’s preparation for the oil and gas sector using a contractor whose clientele includes United States oil major ExxonMobil, the United Kingdom’s Guardian newspaper has reported.

“The World Bank claims to be striving for ‘good governance’ in revising Guyana’s legal framework for oil development,” Heike Mainhardt, senior advisor on multilateral financial institutions at Urgewald, was quoted as saying in the report. “However, they are hiring the law firm who counts among their major clients ExxonMobil – the company leading the oilfield development in Guyana. This is ‘good governance’ for the oil companies, not for the people of Guyana or the global climate. The World Bank is causing a conflict of interest, in effect undermining good governance,” he added in reference to law firm Hunton Andrews Kurth LLP, which has been retained to advise on the oil and gas industry.

Last year, the World Bank approved a US$20 million loan for a Guyana Petroleum Resources Governance and Management project.

The Ministry of Finance had said that government, recognising the risks associated with being a new oil and gas producer, negotiated the loan to address governance and management risks from inadequate policy, legal and regulatory frameworks and institutional capacity.

A signing for the release of the loan was done on April 11, 2019.

The same month, government invited applications for a consultant to provide advisory services on legal matters in the oil and gas industry. According to the Terms of Reference, published on the Ministry of the Presidency website, the objective of the assignment was for the consultant to provide advisory services and technical support on legal and regulatory frameworks for the oil and gas sector to the Government of Guyana, through the Department of Energy.

It said the consultant would be required to support the Attorney General’s Chambers in reviewing, assessing, and, if necessary, re-drafting necessary legislation to ensure that draft legislation is in good order for presentation to the National Assembly for passage into law.

The consultant would also be required to advise on, and provide a framework detailing legislation, and regulations required for the development of a comprehensive downstream petroleum sector, and support the drafting of such legislation and regulations, initially focusing on the use of associated gas.

The terms of reference enables the development of local content in the area of regulatory frameworks surrounding the oil and gas sector, as the contractor is required to provide constructs for the transfer of knowledge, including mentoring arrangements to Guyanese lawyers within the Department of Energy, the Attorney General’s Chambers, and other ministries or agencies as identified by the Department, on legal aspects of the petroleum industry.

Last month the Department announced that Hunton Andrews Kurth LLP and Cameron and Shepherd, which has among its partners Senior Counsel Ralph Ramkarran, had been awarded the contract to the tune of some US$1.2 million.

But Urgewald said that the World Bank has pledged not to fund fossil fuel extraction directly, but it is still giving Guyana millions of dollars to develop governance in its burgeoning oil sector.

“The World Bank reviewed the procurement and found no problems with the process. The Washington-based bank will fund the work with a grant worth $1.96m (£1.5m),” the Guardian report noted.

“Hunton Andrews Kurth has acted for ExxonMobil for 40 years, including multiple cases involved in climate impacts, such as an action by Native Americans in the Alaskan village of Kivalina who argued that the climate crisis was threatening their way of life,” it added.

The Guardian also pointed out that the World Bank has already faced criticism over its involvement in the oil sector.

“It garnered praise from environmental campaign groups in 2017 when it pledged to stop investment in “upstream oil and gas”. However, the Guardian previously reported it had earmarked $55m to improve governance in the oil and gas sector in Guyana,” the newspaper said.

Hunton Andrews Kurth, according to the Guardian, declined to comment, citing client confidentiality concerns, while this country’s Department of Energy did not respond to requests for comment.

ExxonMobil, the Guardian said, has stated that it was “committed to the highest standards of business conduct” and that “any reports speculating or alleging the appearance of anything improper are baseless and without merit”.