Minister Trotman’s office seriously misunderstands the oil business

Mar 15, 2017 Letters

Dear Editor,
I thank the Ministry of Natural Resources for a courteous response to my recent letter. However an assurance that the government is ‘carefully and assiduously’ building the capacity of the EPA, the Marine Administration Department and the Civil Defence Commission rather misses the point. What action has Exxon taken to demonstrate to Minister Trotman that it will not inflict damage on Guyana’s environment? Is Exxon going to redo its environmental impact assessment in order to comply with the Environmental Protection Act 1996? What steps is Minister Trotman taking to ensure that the current contract has the right terms for a company with Exxon’s environmental record?
There seems to be, within Minister Trotman’s office, significant misunderstanding of the oil industry. At a recent public forum, Dr Jad Mangal, an adviser to Minister Trotman on oil, admitted that he was not familiar with Exxon’s environmental record or the US$74Bn fine imposed by Chad. Dr Mangal informed the same audience that the relationship between an oil producer and the host country was like a marriage. Nothing could be further from the truth. Oil production is a hardnosed commercial affair. An oil producer wants as much money as possible. It will cut costs as much as it can get away with. It wants to pay as little as possible to the host country.
Has Exxon told Minister Trotman what steps it will take to ensure there is no repeat in Guyana of the financial crimes committed in the USA and Chad? What is Minister Trotman doing to make sure that Exxon cannot do to Guyana what it has done to other countries? A ‘marriage’ between any government and an oil producer is a cosy arrangement that spells disaster for the host country. That is precisely what the Guyanese people are afraid of. Minister Trotman must now publish the contract. There also seems to be, within Minister Trotman’s office, a serious misunderstanding about the role of a contract, national law and ministerial responsibility. I wrote that Exxon “must be made to carry out this oil venture in compliance with the law, using the best available technology, and with systems designed to protect, not damage, the environment.” The Ministry’s letter asserts that the contract and the law give Exxon a ‘mandate’ to do so. Absolutely not!
Exxon has no ‘mandate’. Exxon has a commercial contract. That contract should impose obligations on Exxon in order to protect Guyana’s people and environment. The contract should provide for sanctions if Exxon breaches those obligations. If the government has been strong, those sanctions will hurt and will be a strong incentive for Exxon to behave. If the government has been weak, the sanctions will also be weak and Exxon will have too much power over Guyana.
Raphael Trotman, in his role as the Minister of Natural Resources, has the responsibility to ensure that natural resources are used for the benefit of the Guyanese people. Remember that the oil belongs to the State not the Government. The State is not the Government. The State is the people of Guyana. Minister Trotman’s mandate is subject to the Constitution, national law and the common law. This legal structure puts limits on Minister Trotman’s authority and requires him to exercise his ministerial power for the benefit of Guyana and for no other purpose. Minister Trotman must immediately make the contract public or explain to the people of Guyana why not.
Melinda Janki

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