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—Civil society, citizens outraged over proposed amendments to NRF
—as govt gives itself sweeping control over fund
The proposed amendments to the Natural Resources Fund legislation have massive consequences for the governance of the oil sector here if passed in the National Assembly and calls have already been made for it to scrapped as the government gives itself sweeping control of the fund.
Vice President Bharrat had telegraphed the administration’s intent one week ago when he complained about the composition of the oversight committee. In the amendments proposed, the administration has reduced the body from 22 members to nine. The persons or representatives proposed will all be appointed by the President and will likely be handpicked from organisations friendly to the administration.
According to a Kaieteur News report there will be two key committees and a Board of Directors to preside over the management of the nation’s oil fund. However, all of the members on these committees as well as the Board will be appointed by the President or his Minister responsible for natural resources. As part of the governance structure for the NRF, the government proposes to establish a Board of Directors which shall comprise of not less than three and not more than five persons who shall be appointed by the President, and one of whom shall be appointed Chairperson by the President. The amended Bill proposes that the directors be selected from among persons who have wide experience and ability in legal, financial, business or administrative matters. It was noted that one of the Board members shall be nominated by the National Assembly along with one from the private sector. The Bill states that the directors shall be appointed for a period not exceeding two years and shall be eligible for reappointment.
It is being proposed that the appointment of the directors and every change in appointment shall be published in the Official Gazette, on the website of Ministry of Natural Resources and in two daily newspapers circulating in Guyana. With respect to its functions, it is being proposed that the Board be responsible for the overall management of the Fund, reviewing and approving policies of the Fund, monitoring the performance of the Fund, ensuring compliance with approved policies, exerting general oversight of all aspects of operations, and ensuring the Fund is managed in compliance with the Act and other applicable laws. The Board would also be responsible for preparing the investment mandate. It was noted that when preparing or amending the mandate, the Board would have to seek the advice of the Investment Committee, be assisted by the Senior Investment Advisor and Analyst of the Fund and enter into an operational agreement with the Central Bank for the operational management of the fund.
Apart from the Board, there would also be an Investment Committee which shall have seven members appointed by the Minister of Natural Resources. They will include nominees from the Minister of Finance, Minister in charge of the oil sector, the Attorney General, Leader of the Opposition, the Private Sector and two ex officio non-voting members: the Senior Investment Advisor and Analyst and a nominee from the Governor of Bank of Guyana. The Committee would be required to take account of the current conditions, opportunities and constraints in the relevant financial matters, the principle of financial diversification with the objective of maximizing risk-adjusted financial returns and taking into account the capacity of the institutions involved in the management of the fund and the nation’s ability to bear financial risk. Regarding the Public Accountability and Oversight Committee, based on the amendments, the government has kept a revised version of the body which includes nine members, they include one nominee from the National Assembly, two from the private sector, two from organized labour, one from the professions and three from the religious community.
The current law which was promulgated under the APNU/AFC coalition the 22 members include representatives from women’s organisations, the Bar Association of Guyana, the Guyana Consumers Association, the Guyana Extractive Industries Transparency Imitative (GY-EITI), the Guyana Press Association (GPA), the Trade Unions, the Chartered Institute of Accountants, the University of Guyana, the Private Sector and 10 persons from the Regional Democratic Councils around the country. The then Finance Minister, Winston Jordan had said that the committee is set up in a way to ensure that there is representation from every geographic region in the country so that they can have a “peeping eye” over the funds.
Meanwhile, expressing disgust over the proposed amendments to legislation being advanced by the PPP/C Government Former chairman of the Guyana Gold Board, GHK Lall said Guyana’s short oil history has been cursed with secrecy, uncertainty, and lack of credibility from day one. He said leaders have not been transparent nor persuasive on how they have stewarded the oil wealth of this poor, hopeful society. “Based on leaders’ palpable taint in their oversight of this oil, it is vital that citizens be comforted with protective layers that are robust and possess depth,” Lall said “Thus, for the VP to discard two committees for reasons that are far from convincing (Complex for one, and cumbersome, for the other) reeks of the self-serving, heavy-handed, and possible ulterior motives. Given his own history of leadership evasions, and other questionable and troubling behaviors in governance and other sectors, these oil committee removals eliminates intentionally tight regulations, and replaces with the deception of sturdy substitutes, subject to his whims and tricks, and posing great menace to the hopes of Guyanese.” Lall said Guyana does not need committees answerable to his machinations, bit ones that give some comfort, regardless of how complex or cumbersome, they may appear.
Writing on his Facebook page, prominent businessman, Terrence Campbell said back in 2016/2017 it was suggested to the Coalition government that the correct approach was to work with the opposition on the NRF and embed its provisions in the Constitution. “The fear about passing the NRF as ordinary legislation was that future governments would change its provisions to suit their own objectives/desires. My words have no weight. Notwithstanding that fact, I am publicly declaring my opposition to the proposed changes to the NRF. I am publicly stating that the funds in the NRF belong to the citizens of Guyana and the changes open up the possibility of wholesale theft of these funds,” Campbell stated.
He said what is worse, “is the lenient approach to environmental issues associated with the oil sector opens the possibility of future burden on the citizenry through wholesale theft and clean-up costs from potential spills. This is totally unacceptable and every citizen, including PPP supporters, should rise up and oppose the proposed changes to the legislation. Finally, I am so disappointed at the deafening silence from those who were comrades in arms in calling for constitutional reform when the Coalition was in power.”
In a scathing Page One comment, the privately owned Stabroek News calls for the scrapping of the amendment bill. The newspaper said after being derelict for 16 months in its responsibility to activate the Natural Resource Fund (NRF) Act, the government on Thursday tabled a wholly unacceptable bill in the National Assembly that must be withdrawn and recomposed. “Not only is this bill, the Natural Resource Fund Bill 2021 a coruscating example of the mountain having laboured to produce a dud, its toxicity is insidious. In part it seeks to replace oversight of the Fund by a “Board of Directors” which clearly will be handpicked by the PPP/C from among its followers and handmaidens in the private sector and elsewhere. The configuration proposed will ensconce the country’s earnings from oil and gas in the laps of a select few of the PPP/C’s adherents,” the Stabroek News wrote. According to the newspaper as had been suspected by many, the PPP/C government has talked a lot but openness, transparency and unity but its hypocrisy is off the charts. “Having said it will not seek political and ministerial control of the Fund, in its current form it does exactly that with this bill. Having said that it will be careful in expenditure of oil monies it plans to empty the fund in the first year of its operation. Nothing short of a bipartisan parliamentary agreement on the NRF can be acceptable. Nothing short of credible personages at the helm of the fund, whether from here or abroad, will be acceptable. This is a shoddy bit of legal drafting that does not even say how the “Board of Directors” will be chosen. What is the government doing with all of the supposedly expert advice it has been cultivating and drawing loans and grants to facilitate?” The newspaper said President Ali’s government has been sufficiently opaque on the oil and gas sector to raise concerns about its intent. Its needs an urgent recalibration of its trajectory and a good start will be made with the canning of this bill.
Leader of the Alliance For Change (AFC), Khemraj Ramjattan had told this newspaper last week that he believes Jagdeo intends to use the oil money in a manner that will score him political points. Ramjattan said that the VP is using his powers to control the country. “Democracy is not only made up of winning an election. Democracy is also made up of good governance in between the election and to take away the 22-member body is a very very bad move,” Ramjattan argued. Furthermore, he accused the administration of fiddling with the fund so as to control what the money is spent on and in what amounts. He said, “Jagdeo may very well take it and do it as he likes conveniently to win an election, buy votes and (to fund) projects that might very well not be in the interest of Guyana, like reopening the Skeldon Estate and all kinds of nonsense, whereas a 22-member team that is made up of these civilians rather than politicos, would have a better idea of whether we go back to Skeldon or not, rather than Jagdeo, Irfaan and Ashni”.