ExxonMobil no longer obligated to disclose oil payments to Guyana

Mar 05, 2017 News

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… after Trump repeals key disclosure law

By Kiana Wilburg
In the eyes of many, the coalition Government is making moves to shield the extractive

industries from the ills of corruption.
One of the ways in which the administration is seeking to insulate the industry is through application for membership with the Extractive Industries Transparency Initiative (EITI).
EITI is an international body that allows scrutiny of Government’s records of what it receives from companies in the extractive sectors.
These include oil and gas, mining and forestry, among other areas.
The body also urges for the contracts of those companies in the sector to be made public, as well as other measures for guarding against corruption.
The requirement disclosures are expected to bring a level of transparency and accountability in the extractive sector. But with the emergence of a multi-billion-dollar oil sector, the Government of the day is of the belief that EITI is necessary.
As such, it is doing everything possible to safeguard the earnings from oil and gas by working to fast track Guyana’s application to EITI.
The Government’s action in this regard is spurred particularly by the declaration of significant oil finds by one of the richest American oil companies in the world, ExxonMobil.
Should Guyana become a member of EITI, it will be required to ask all companies in the extractive sector, including Exxon Mobil, to reveal what it is paying the government, among other things.

It was in February that newly-sworn in President of the USA, Donald Trump, signed a Bill that killed a Securities and Exchange Commission (SEC) rule which required American oil and gas and mining companies to disclose in detail, the payments they made to foreign governments. The law was meant to promote transparency in countries riddled with corruption.
Former CEO of Exxon Mobil and now US Secretary of State, Rex Tillerson, is on record as saying that the Obama-era rule which required such high levels of disclosure would put American companies at a disadvantage.
Since the law was repealed, it has attracted much criticism from anti-corruption bodies, including EITI. In fact, Chairman of EITI, Fredrik Reinfeldt, has since spoken against Trump’s move.
Reinfeldt said that the law which had allowed for American companies to disclose what they are paying foreign governments was a complement to the EITI disclosure requirements.
He added, “I reiterate earlier held EITI positions on this matter. Our aim is to ensure responsible and transparent resource governance and this requires multiple efforts. The SEC took great care in drafting these rules in consultation with industry to ensure that they complement the EITI’s efforts and avoid unnecessary duplication.
“I would urge Congress to consider this matter thoroughly, and to ensure that any action does not undermine the hard-won gains in this arena.”

GUYANA’S APPLICATION
While there are a few more stages left to go through, Guyana certainly made significant headway recently as it relates to its application for membership to the Extractive Industries Transparency Initiative with the launching of Guyana’s very own EITI Multi-stakeholder Group (MSG). This is one of the requirements for Guyana to make it into the EITI fold.

Speaking to the importance of the initiative, Dr. Rudy Jadoopat, National Coordinator of Guyana’s EITI Secretariat, said that EITI brings together a number of groups.
He said that these include oil and gas companies, representatives of government, local and international stakeholders and assessment management companies.
The National Director stressed that the objective of the EITI is to bring international and acceptable standards for transparency to the oil, gas and mining sector.
The National Director said: “EITI creates opportunities for the building of trust among stakeholders and indeed the community at large.
“Companies are required to disclose what they pay to government and the government must in turn disclose what receipts from the companies are made.”
He added: “These figures are then compared to discover any discrepancies, and the information made public as a way to foster public scrutiny and greater accountability over natural resource profits earned by governments…”
The Director said, too, that Guyana has already satisfied a number of requirements. However, there are still a few steps which need to be completed. These include adapting the terms of reference of the MSG, determining the materiality and scope, to review and finalize a draft work plan, to prepare a communication strategy and plan for it, to review and ensure the finalization of the scoping study which was commissioned and prepared by a consulting firm etc.
The National Director assured that the Secretariat will provide support to the MSG.

THE GEITI –MSG
Minister of Natural Resources, Raphael Trotman, also provided an update on Guyana’s status thus far. He said that the GEITI –MSG is a primary body which will be responsible for overseeing and coordinating the successful implementation of the global EITI standards.
The Natural Resources Minister said that the body will provide and establish a framework to promote collaboration and consensus building in implementing the EITI accordingly.
He said that the grouping is a true demonstration of inclusivity and transparency as all stakeholders are represented at the table. Trotman said that this includes government, civil society and industry.
With four members and equivalent alternates on the MSG, Trotman noted that the Government will be represented by high level officers from the Ministry of Natural Resources, the Office of the Prime Minister, the Ministry of Finance and the Guyana Revenue Authority. He revealed that the GEITI will be chaired by the Ministry of Natural Resources.
“The Government has approached the EITI process with a commitment to transparency and openness as well as recognition, acceptance and a deliberate effort to foster the truth that the resources of Guyana belong to every Guyanese in equal measure,” said Trotman.
“This EITI initiative has the potential to bring significant benefits to the Guyanese economy through increased accountability and transparency, translating into more informed policy debates and guidance on managing our resource endowments.”
He added: “It also has the potential to increase the potential of investor confidence and enhance Guyana’s reputation as a sound investment destination. This process joins a suite of initiatives that this government has committed to and is actively pursuing to strengthen public institutions and systems for managing resources and revenues from the extractive sector.”
Trotman, the leader of the Alliance For Change faction of the Coalition Government, noted that efforts to find a suitable standalone location for the EITI secretariat have already commenced.
Trotman added that hiring additional support staff for the Secretariat has already begun. He hopes to have a full staff for it before the end of the first half of the year.
Trotman said, too, that in the coming weeks, there will be an outreach programme to engage the public on all matters of importance and interest within the natural resources sector.
Oil has been seen as a major boon to Guyana, which has been described as one of the poorest nation in this part of the hemisphere. ExxonMobil’s find is estimated to be at least 1.4 billion barrels.

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