Comprehensive legal framework for petroleum sector

WITH the advancements anticipated to accompany the oil-and-gas sector, preparations are in progress to meet the challenges that will emerge within the legal sector.

According to Attorney-General Mr. Anil Nandlall, by venturing into the oil-and-gas industry, Guyana is entering uncharted territory, and as such the legal sector must be metamorphosed to handle the challenges that would occur.

“The legal system was never fashioned or equipped to deal with this sector, and the country, therefore, must put in place, at every level, the necessary infrastructure, rules, regulations and trained personnel to meet the demands of the sector,” he explained.

The Government foresees a number of issues that they are already working on, including but not limited to legislative framework, dispute resolution, human resources, inclusive of legal personnel, and changes to the commercial landscape.

“We have to refashion or adjust our legal system and the legal sector to meet the demands of this new industry, which requires legislation. Our Petroleum Act, for example, was enacted at a time when we were not an oil-producing country, and therefore completely out of sync with the current realities,” the AG said, adding:

“Then we have to set up a commission of technical personnel who will have to advise and manage the sector. We have to have a local-content policy in place; all of this requires a legislative framework within which they must operate.”

Apart from the legislative framework that is necessary to transform the sector, the enforcement and administration of the legislation is also of equal importance.

New legislation would mean a new jurisprudence, and in the event of a violation of the legislation, the judiciary should be properly equipped to deal with such matters.

Judges will be trained to interpret legal principles never embraced before, and new concepts of law never dealt with before.

The adversarial court system is usually a last resort option for the commercial industry, therefore, the Government will be seeking to implement schemes of Alternative Methods of Dispute Resolution (ADR), and legislation to facilitate said ADR.

“If one is to look at the contracts and the documents emanating from the sector, you will see that there’s a consistent provision for disputes to be resolved by arbitration,” Nandlall explained.

The current legislation to facilitate Alternative Methods of Dispute Resolution is the Arbitration Act 1919, with minor amendments.

As a result of this archaic law, investors looking to conduct business in Guyana include clauses in their agreements to expedite the ADR process in foreign nations such as Europe and North America.

The Attorney-General stressed that it is not conducive to our growth and development when parties are forced to resort to overseas expertise to perform these basic undertakings, and there is a wealth of opportunities associated with this being done locally.

“As a Government, it is our responsibility to ensure that these disputes are resolved here, so that, first of all, it will be quick; secondly, it will be less expensive, and thirdly, there are great benefits which can be derived from the disputes being resolved here. It will provide jobs for people; it will generate income, and it will make Guyana an attractive litigation and arbitration destination,” Nandlall explained.

As consultations are already underway to draft the related legislation, Nandlall explained that it will follow the model legislation prescribed by the International Arbitration Organisation.

The Government will also sign on to all the modern arbitration-related treaties and international arrangements to incorporate such into domestic legislation.