Minister is delegating his authority to a foreign entity

May 30, 2017 Letters,

Dear Editor,
In April 2017, TIGI issued a statement (published on April 30, 2017) indicating that after a month it had not received a response from the Minister of Natural Resources to its letter requesting him to share with it (TIGI) the types and particulars of the studies and investigations he has requested as part of the process for evaluating Exxon’s production licence application. TIGI now publicly acknowledges that the Minister replied on May 2, 2017. The Minister’s response has however raised additional questions and even caused some concerns.

Apart from making a general request for information, TIGI had in particular asked if, as provided for in the existing legislation, the Minister had requested ExxonMobil to submit an economic feasibility study of its proposed (upstream) operations in the Stabroek Block. Instead of responding directly, the Minister indicated that “the matters raised in your letter are presently being addressed by the Guyana Geology and Mines Commission (GGMC) in conjunction with an international consulting company, Worley Parsons.”

From this response, it would appear that the Minister is attempting to delegate his responsibilities as spelt out in Section 33 (1) of the Petroleum (Production and Exploration) Act of 1986 (and the accompanying Regulations) to the GGMC and to Worley Parsons, a foreign company.

It is important for the Minister to realise however that the GGMC would find it difficult to raise serious concerns about ExxonMobil’s proposed development plan should any exist, if the Minister has already made a political commitment to the project. The temporal order of the actions is important for the outcome to be more meaningful than merely the “ticking of boxes.”

Furthermore, the services of Worley Parsons were presumably procured under Section 49 of the Procurement Act of 2003 which provides for single sourcing “where services to be procured require that a particular consultant be selected due to the consultant’s unique qualifications.” The Minister must therefore be so impressed with the unparalleled and indisputable reputation of Worley Parsons (and uninterested in building local capacity) that he would entrust responsibility for Guyana’s patrimony to it.

This too is unacceptable, not the least because Worley Parsons would similarly find it to be bad business to raise serious concerns if any exist, unless the contract it has with the GoG holds it legally liable for any problems with the proposed plan. However, we know little about what Worley Parsons is being asked to do, given the absence of public tender and requests for proposals. The selection of this firm lacked transparency. Indeed, it might even be that Worley Parsons itself is advising on what services must be provided, what studies must be undertaken, and the scope of its undertaking.

The Minister concluded his letter by indicating that Government is committed to holding “stakeholder discussions” after the Worley Parsons and the GGMC have submitted their reports. TIGI wishes to remind the

Minister that the report “Creating Incentives to Avoid Deforestation” by the highly-acclaimed McKinsey and Company was itself the subject of strong criticism by informed stakeholders but that the report having been written and paid for, could not have been readily adjusted to incorporate those concerns. Does the Minister really mean “consultations” or information sessions?

The governance framework is key to preventing perverse results such as the well-known resource curse. As Guyana seeks to develop its oil and gas sector, the governance framework needs to be robust and it needs to satisfy minimum requirements of transparency and accountability. The approach taken so far is wanting of both transparency and accountability and this should be addressed to ensure that the touted benefits of oil to Guyana are realised.

Troy Thomas

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