Concern over powers given to Minister in Petroleum Act

Aug 11, 2017 News

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Many citizens who are following the development of the local oil and gas industry are concerned by the amount of powers given to the Minister of Natural Resources via the Petroleum Commission of Guyana Bill.
While a few persons have expressed their concerns in the letter pages of Kaieteur News with their names attached, others chose to speak confidentially to reporters.
The fear is that Guyana seems to be recreating a situation that it is simultaneously trying to address through Constitutional reform—vesting too much power in one individual.
Some seem to think that the current Minister of Natural Resources, Raphael Trotman, is well equipped to handle matters fairly and effectively. But even those persons are concerned about who may be the Minister coming next.
One highly respected professional who spoke on the grounds of anonymity said, “Minister Trotman is all nice and dandy for now, but you know what power does to people? And even if he keeps his integrity, what about the next minister that takes that chair?”
Another professional said, “We are already dealing with the amount of powers given to the President in the Constitution and we are calling for Constitutional reform to address that problem. But why, if you are going to bring a have a new bill, continue in the same vein of something that we are trying to change?”
The general recommendation seems to be that the National Assembly should have oversight of the Petroleum Commission.
A few weeks ago, Attorney Nigel Hughes delivered a presentation at an academic forum held at the University of West Indies in Trinidad and Tobago. At that forum, Hughes spoke about the many dimensions of Guyana’s embryonic oil and gas industry.
When he turned his attention to the legal aspect, Hughes said that the existing legal and regulatory framework for the industry is thirty years old. He noted that the Petroleum (Exploration and Production) Act was passed on the 14th April 1986.
The respected attorney said that it is evident that not only did does Guyana have to update its legal and regulatory architecture “but we would rapidly have to develop capacities where none existed.”
Hughes told the academics who gathered that in the last quarter of 2016; the Government introduced the Petroleum Commission of Guyana Bill to the National Assembly. He explained that the Bill provides for the establishment and the functions of the Petroleum Commission of Guyana.
The Commission will have to, among other things: review and recommend to the Minister for approval, amendment or rejection the plans, proposals, reports, analysis, data and any other information submitted by an applicant for the granting or renewal of a petroleum prospecting licence and/or a petroleum production licence and when required by the Minister, conduct bid rounds for the grant of licences.
The Commission will be responsible the enforcement of the conditions of exploration and production leases, concessions or exclusive permissions, or any licence, permit or production sharing or joint venture agreement entered into or deemed to be granted or entered into under the Petroleum (Exploration and Production) Act Chapter 65:01.
It is also tasked with the collection and recovery of all rents, fees, royalties, penalties, levies, tolls and any other charges payable under the Petroleum (Exploration and Production) Act Chapter 65:01 and any other revenues of the Commission.
Hughes then said, “Perhaps of considerable importance are the powers to be vested in the Minister under the new Bill.”
He noted that Section 8 of the Bill provides that the Minister may give to the Commission directions as to any policy to be observed and implemented by the Commission in the performance of its functions.
The Minister may direct the organization of the Commission to enable it to discharge its functions under this Act, including the size of the establishment, the employment of staff and the terms and conditions of employment, the provision of equipment and use of funds. The Bill explicitly states “and the Commission shall comply with such directions.”
It does not end there, the Bill says, “In carrying out such measures of reorganization or such works of development as to involve a substantial outlay on capital account, the Commission shall act in accordance with a programme approved, from time to time, by the Minister.”
Even a simple training programme has to be approved by the Minister.
The Bill states, “In the exercise of its functions in relation to training, education and research, the Commission shall act in accordance with a programme approved by the Minister.”
The Bill went on to state, “The power of the Minister to give directions to the Commission under this section shall include, but not be limited to, giving to the Commission directions as to – (a) the disposal of capital assets; (b) the application of the proceeds of such disposals.”
The Bill creates the post of Director of Petroleum who has to be appointed by the Minister. This is provided for in section 20.
Hughes told the gathering in Trinidad, “The Bill is still in the House and hopefully will make its way to Committee, a location where greater consensus.”

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