by Larry Smith
BELMOPAN, Belize -- In a historic ruling here Wednesday (April 16), the Supreme Court nullified offshore oil exploration licenses issued by the government in 2004 and 2007, and extended in 2009.
The concessions were awarded secretly by this CARICOM nation of 356,000 people - sandwiched between Guatemala and Mexico. They included rights to drill for oil on land and in offshore waters, including sensitive protected areas of Belize's famed barrier reef - a UNESCO World Heritage Site.
After a whistleblower brought the concessions to public attention in 2010, scores of civil society groups banded together to form the Belize Coalition to Save our Natural Heritage. The Coalition launched a vigorous campaign against offshore drilling, which was supported by the international marine conservation society, Oceana.
A "people's referendum" held just before the last general election (in March 2012) produced an overwhelming 'no' vote against offshore drilling by more than 29,000 voters. The Coalition also filed for judicial review. A decision on this was handed down Wednesday by Justice Oswell Legall.
In his ruling, the judge said the Minister of Natural Resources and the Environment had “exceeded his jurisdiction when he entered into the agreements without first having or considering an environmental impact assessment of oil exploration on the environment...and therefore the (concessions) are unlawful and void."
He also said the contracts were made with "companies that did not demonstrate a proven ability to contribute the necessary funds, assets, machinery, equipment, tools and technical expertise." For example, in one case a contract was awarded to the owners of a casino.
"Allowing oil exploration before any assessment of its effects on the environment is not only irresponsible, but reckless," the judge said, "especially in a situation where Belize may not be fully capable of handling effectively an oil spill."
The government immediately said it would appeal the ruling, while the Coalition pledged to work towards a complete ban on oil exploration in Belizean waters.
According to Audrey Matura-Shepherd, vice president of Oceana Belize, which filed the judicial review in 2011, the court's judgement was "a great day for the democratic process…It shows that ordinary citizens can use the judiciary to make sure our laws are followed by all, especially the government."
In addition to the marine concessions, most of Belize's 8,867 square miles of land were also allocated out in petroleum concessions, despite the presence of more than 90 protected areas throughout the country. Belize has an international reputation for conservation and nature-based tourism.
The first petroleum discovery was made on land in 2005, after 50 years of inconclusive exploration. That well is now producing over 5,000 barrels per day. The latest discovery was in 2010 when an oil field near the capital, Belmopan, was declared commercial.
Companies have up to eight years to explore for oil, and 25 years to undertake production. If no oil is found within the eight-year exploration phase, the contract self-terminates.
The current United Democratic Party government promised to establish a sovereign wealth fund so that petroleum revenues could benefit all citizens, but this has yet to happen. Meanwhile, oil revenues of about $120 million a year are used by the government for its regular operations.
Princess Petroleum (one of the companies that figured in Wednesday's Supreme Court ruling), belongs to the owners of Princess Casino, and has a contract to explore one million plus acres onshore and offshore. The company is said to be well-connected with politicians of the ruling UDP.
The Bahamas is set to embark on exploratory oil drilling this year, once amendments to our 40-year-old Petroleum Act are implemented. The legislative update will include new environmental regulations governing oil exploration and production.
Only one company - Bahamas Petroleum - currently has active exploration licenses in waters near the Bahamas' maritime border with Cuba. The cost to drill the first exploratory well has been pegged at over $100 million.