AFC warns of Guyana’s likely suspension from international Transparency Initiative

By Mark DaCosta- Alliance for Change (AFC) Member of Parliament Ricky Ramsaroop, speaking at the party’s press conference on July 26, has raised alarms over the probable imminent threat of Guyana’s suspension from the Extractive Industries Transparency Initiative (EITI) due to persistent failures by Guyana in meeting the initiative’s standards. This development poses serious concerns for the transparency and accountability of Guyana’s extractive industries, which include mining and oil sectors.

The EITI is an international standard aimed at promoting open and accountable management of natural resources. Countries that implement the EITI commit to disclosing information about their extractive industries, including how licenses are allocated, how much revenue is generated, and how those revenues are managed and spent. The goal is to ensure that natural resource wealth contributes to sustainable development and poverty reduction.

Since its inception, the Guyana EITI (GYEITI) was intended to serve as a cornerstone of transparency, ensuring equitable distribution of revenues from the country’s natural resources. However, the initiative has encountered several critical issues regarding Guyana that have hindered its effectiveness. These issues include incomplete sector coverage, data accuracy and timeliness problems, governance and oversight weaknesses, and a lack of tangible impact and accountability.

One of the major concerns highlighted by the AFC is the incomplete coverage of all extractive sectors. The GYEITI has struggled to include small-scale and informal mining operations comprehensively, leaving significant gaps in transparency efforts. This incomplete sector coverage undermines the initiative’s goal of providing a full and accurate picture of the extractive industries in Guyana.

Data accuracy and timeliness have also been problematic. Reports have frequently been delayed and plagued by inconsistencies, casting doubt on the reliability of the information disclosed to the public. This lack of reliable data hampers efforts to monitor and manage the sector effectively.

Governance and oversight issues further complicate the situation. Persistent concerns about the GYEITI’s governance structure, its independence, stakeholder engagement, and operational capacity undermine its credibility. These governance issues prevent the initiative from functioning effectively and fulfilling its mandate.

Moreover, despite the data disclosures, there has been a notable absence of concrete improvements in governance, corruption reduction, or effective revenue management. The AFC points out that out of the seven recommendations made by the international transparency body in the 2020 report, only two are ongoing, with the rest unfulfilled and repeated in subsequent reports. These ongoing breaches have already led to Guyana’s suspension once, and continued non-compliance could result in delisting from the EITI.

A particularly troubling issue involves discrepancies between payments reported by companies and receipts reported by the government. For instance, ExxonMobil Guyana Limited reported payments of GYD 33.2 billion, whereas the government reported receiving GYD 36.4 billion, a discrepancy of approximately GYD 3.2 billion. Other companies, such as Bosai Minerals Group and Aurora Gold Mines, also showed significant differences in reported figures.

A comprehensive table presented by  Ramsaroop includes the following detailed information which financial analysts may find useful:

The implications of a potential suspension or delisting from the EITI are significant. It would not only damage Guyana’s international reputation but also reduce investor confidence in the country’s extractive industries. A suspension could lead to decreased foreign investment, as transparency and accountability are key factors for investors when deciding where to allocate resources.

The AFC has called upon the government to undertake urgent reforms to address these systemic issues. Enhanced transparency measures, strengthened governance frameworks, and proactive steps to engage stakeholders and rebuild trust are essential to restore confidence in Guyana’s extractive industries.

The AFC reaffirms its commitment to promoting accountability and transparency in Guyana’s extractive sectors, emphasising the importance of responsible management of natural resources for the long-term prosperity of the nation. The future of Guyana’s membership in the EITI now hinges on the government’s willingness to implement necessary reforms and uphold the principles of transparency and accountability the AFC said.