Ralph Ramkarran, Stabroek

The Petroleum Commission

By  stsbroek news

Very little debate has taken place on the Petroleum Commission of Guyana Bill. It is to the credit of the Georgetown Chamber of Commerce and Industry to have initiated a public discourse on the legislation around the country, albeit late in the day. The lead speaker was former Energy Minister of Trinidad and Tobago, Kevin Ramnarine, who has tremendous expertise in many aspects of the oil industry and who has visited Guyana several times sharing his knowledge. He was ably assisted by Mr. Deodat Indar, the president of the Georgetown Chamber of Commerce, which has been invigorated in recent years by many young business leaders who are dedicated to its agenda of promoting business and commerce.

The business community is deeply interested in the Bill because it seeks to establish the institutions that will oversee the oil industry and to define the rules which would guide their functions and duties. Since it is likely that when passed, the Bill will impact the business community by providing opportunities for its growth and development for decades in the future, it is vital that not only business, but the people of Guyana, take an interest in what is being proposed to maximize the potential for Guyana.

The Minister’s powers under the Bill readily attracted headlines, to the exclusion of some of the other serious issues which were discussed. The issue with the Minister’s powers was not that he had them but that they were so obviously and prominently entrenched, as compared to other similar legislation establishing regulatory commissions. There was no dispute that the government would want a majority of members on the Petroleum Commission (the size and composition of which was not defined) and on the Board of Directors. Through its control of the majority, it would be able to influence decisions, including the appointment of senior officials.

Generally speaking, in bodies such as these, Ministers reserve powers to set general policy and issue general directions. In relation to the Petroleum Commission, however, the Minister reserves power to issue instructions over a wide range of matters which detracts from the independence of the Petroleum Commission and the Board of Directors. It is understandable that in the newly emerging oil industry which will be Guyana’s leading income earner for decades to come and which has had no regulatory mechanism in place, that the government will want a high degree of influence. But the same powers which the Minister takes for himself could have been obtained by a far lighter legislative touch.

One major issue that came up for discussion was that of “local content.” This was not highlighted in the reporting, but businesspeople were very interested in how it would work and what benefits it holds for Guyanese. Supplies to the oil industry would become a multi-billion industry and it was highlighted that Guyanese business people need to take an interest in this issue now and get on board with the programme. It was the view of the panel that the government ought not to rely on moral suasion alone because it is not likely to be successful. It was recommended that legislation enforcing “local content” would be more effective. The Petroleum Commission of Guyana Bill sets it out as an objective.

It was noted that the size of the Board of Directors of ten members, which is entitled to appoint committees, three of which were specified, is on the small side and that twelve to fifteen members would enable the Board to function more effectively. Weighted majorities and unanimous decisions were also proposed for important decisions. It was suggested that an environmentalist be a member of the Board. It was also suggested that the Leader of the Opposition should choose the Opposition representative rather than the Minister.

It is a disappointment that the Bill has not been more widely discussed. The Government ought to take the initiative. It is not enough that the Bill is merely disseminated. The Government and the Bill will benefit from wider consultation, even if it does not agree with every proposal. There is wide interest in these issues.

It is regrettable that this government, like the last one, treats mild criticism, delivered with levity, as contentious. One headline screamed on Friday “Ramkarran misleads on provisions for transfer of funds.” The issue was payment of income of government agencies and the Commission into the consolidated fund. The government, when in opposition, consistently argued that such payment is mandated by the constitution and is not subject to the whim of any official. The Bill provides that payment of monies by the Commission to the consolidated fund is, in fact, subject to the whim of the Minister. If the government wants to hurl headlines, it should first explain why it speaks through both sides of its mouth, and from a high horse when cornered! This attitude to criticism is exactly what Guyana does not want at this stage of the development of the oil industry. Warning was given that everything must be done to ensure that the oil industry does not become a political football. The Government must lead the way.

Subject to what is set out above, the Bill, broadly speaking, is necessary and must be supported, even if with reservations.

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