Environmental groups challenge US$5.5bn Bahamian refinery project

Environmental groups in the Bahamas intend to seek a judicial review of the decision by the Bahamas Government to sign a US$5.5bn deal with Oban Energies for the development of an oil refinery and storage facility at an undefined location at East End, Grand Bahama (Caribbean Insight February 23, 2018).

Several local environmental bodies, some with external support, are set to challenge the possible impact and the manner in which the agreement was reached with Oban, which has no track record of its own in undertaking such operations.

A local group, Save The Bays (STB) says that it intends to file for a judicial review which will seek to question the government’s handling of the development, the concessions made and a controversial environmental impact assessment (EIA) clause contained in the Heads of Agreement (HOA).

In a statement, the Bahamas National Trust (BNT) said it “cannot envisage any scenario where BNT could support this project”.  Eric Carey, the BNT’s Executive Director said that without knowing exactly where the project would be located it was unable to provide advice on concerns within the context of the National Parks and other sensitive marine and environmental areas.

Other groups have also expressed their deep concern

On February 19, the government signed a Heads of Agreement (HOA) with Oban. However, it was later revealed that the signing was “ceremonial” and Oban Energies’ President, Satpal Dhunna, had already signed the official HOA. Environmentalists and advocacy groups subsequently made clear they were particularly concerned that the agreement contained language that would enable the project to proceed without an EIA, effectively locking the government into the project irrespective of any environmental damage it might cause.

According to reports in the Bahamian media the HOA states: “The parties agree that the government shall not have the right to terminate these heads of agreement based upon any EIA report, but instead shall work with the developer to mitigate any concerns”.

Speaking to Tribune 242, Save The Bays Chairman, Joe Darville, said: “Everything about the deal with Oban Energies sends up red flags. The absence of public consultation, lack of transparency, no environmental impact assessment prior to signing the Heads of Agreement, no environmental management plan, even the legally troubling background of the face of Oban Energies. But nothing is of greater concern than what a crude oil refinery could do to the people of Grand Bahama because of its location less than 50 miles east of Freeport”.

“With the prevailing southeast winds, a plant that handles 4m barrels of crude oil annually could wipe out life in Grand Bahama as we know it with toxic fumes and discharges in the air like living in the shadow of a constantly burning dump. You cannot make crude oil clean and our fear is that our air will become so filled with smog, our lungs assaulted, our beaches and wetlands and parks polluted, our wildlife and marine life impacted”.

Tribune also reported that the agreement commits Government to changing the Bahamas’ tax incentive laws by introducing legislation that will “accommodate” the Oban Energies project. By allowing for an “extended” period of tax concessions.

Despite attempts by local media to find out more about the background of the company, it remains unclear who the owners of Oban Energies are.

Responding in Parliament on March 22, Dr Hubert Minnis, the Bahamas Prime Minister, sought to lessen the criticism by saying that government “should have done more comprehensive due diligence” and “should have engaged in wider environmental consultation.”  He indicated that the project will be reviewed, and must go hand in hand with the protection of the environment and the conservation of natural resources.

This is a lead article from Caribbean Insight, The Caribbean Council’s flagship fortnightly publication. From The Bahamas to French Guiana, each edition consists of country-by-country analysis of the leading news stories of consequence, distilling business and political developments across the Caribbean into a single must-read publication. Please follow the links on the right-hand side of this page to subscribe, or access a free trial.

Photo Credit: James Daisa, ‘Shell Refinery at Dusk-6’, Flickr