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IMF faults the conclusion on confidentiality clauses
… disclosures will encourage accountability, more informed public debates
By: Kiana Wilburg
For months, members of the coalition administration and even stakeholders within the petroleum industry have stated repeatedly that due to the confidentiality clause embedded in Production Sharing Agreements (PSA), such oil documents cannot be released to the public.
But the International Monetary Fund (IMF) does not agree with this viewpoint. In a report it did on Guyana’s upcoming oil sector and the prospects it holds, the IMF made it clear that the release of PSAs actually improve accountability as well as the public debate.
In fact, the IMF said that going forward, PSAs should be made public.
In its report which was handed over to the Government earlier this year, the IMF said, “…The confidentiality clause in the model PSA does not appear to apply to the agreement itself. The mission’s understanding of Article 9.2 is that only Petroleum Data, information and reports obtained or prepared by the Contractor in relation to the Contract Area covered by the PSA are confidential.”
The IMF continued, “The authorities may wish to seek legal advice from the Attorney General regarding the interpretation of the confidentiality clause. Going forward, it would be preferable to make PSAs public. Disclosure of agreements, especially within government, is essential for a coordinated and effective management of the sector.”
The global body added, “Disclosure of fiscal terms provides the basis for a more informed public debate and accountability. Finally, contract transparency may also allow governments to negotiate more effectively within a level playing field.”
NO LAW OR LOGIC
The excuse by Government that confidentiality clauses inhibit the release of oil contracts in Guyana, particularly the one with USA oil giant ExxonMobil, does not sit well with a number of anti-corruption advocates.
Speaking recently on this matter was Chartered Accountant Chris Ram. On his website, www.chrisram.net, Ram said it is important for one to bear in mind that the Production Sharing Agreement under which oil companies are granted licences for the exploration and development of petroleum, indeed, imposes confidentiality obligations.
Ram noted, however, that this is ONLY in respect of “petroleum data, information and reports obtained or prepared by the oil companies”. The attorney-at-law said that any statement to the contrary is not only misleading but false.
Ram said that the principle of transparency and the overriding public interest in such contracts have even caused a number of such contracts to be made available both at the national and international levels.
The Chartered Accountant noted that the University of Dundee, Scotland; Revenue Watch Institute, a Non-Governmental Organization; the World Bank, among others (resourcecontracts.org) are facilitating the process by collecting and disseminating them in searchable databases on the internet.
Additionally, the attorney-at-law commented, “Neither law, logic nor the public interest requires or favours the continuing withholding of the oil contracts signed by the Government of Guyana ostensibly acting on behalf of the people of the country.”
Kaieteur News even carried an article a few months ago which reveals that over 50 countries around the world make their contracts open for scrutiny.
This was exposed by the website, Openoil.net. These contracts are also available for download on that website. Openoil has one of the world’s first comprehensive archive lists of oil contracts. These are pulled from states such as Mexico, Angola, Chad, Guatemala, Cameroon, Equatorial Guinea, Egypt, Kazakhstan, Syria, and Ukraine.
USA oil giant, ExxonMobil has operations in all of the mentioned countries in which disclosure of contracts is practiced.
Officials, who support the Openoil webpage, categorically believe that all contracts which govern publicly owned natural resources and the livelihoods of people should be placed into the open for all to access and examine.
With mounting pressure to release the contract, the government made the decision several weeks ago to have the contract it has with ExxonMobil, released to the public this month.
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