Latest update December 22nd, 2024 2:50 AM
Guyana must boost its transparency mechanisms for accounting oil money – NRGI
Transparency is central to the aim of transforming natural resource wealth into sustainable economic and social development. But for this to happen in emerging oil producing countries like Guyana, the local authorities have to be prepared to boost its transparency mechanisms for the accounting of oil money. 
This is according to the Natural Resource Governance Institute (NRGI), an independent nonprofit organization dedicated to improving countries’ governance over their natural resources.
NRGI noted that many countries like Guyana can pass laws or begin transparency initiatives that go beyond what is called for with the international mechanisms. It said that some of these national initiatives may have standard-setting power or apply to multiple jurisdictions, giving them the reach of international initiatives.
In this regard, NRGI said that many countries have created extractive related transparency processes that go beyond what may be required for compliance with international standards, such as the Extractive Industries Transparency Initiative (EITI).
It said that in Ghana, for example, the Petroleum Revenue Management Act (PRMA) created a Public Interest and Accountability Committee (piacghana.org). The Institute said that this independent multi-stakeholder group is charged with monitoring and enforcing government compliance with revenue management regulations.
Turning its attention to commodity trading, NRGI said that countries like Switzerland and the United Kingdom, as well as the European Commission, have committed to enhancing payment disclosure on the sale of oil, gas and minerals. NRGI said that this will significantly reduce the secrecy that prevails in commodity trading since jurisdictions like these have a large market share of companies involved in this corner of the natural resource sector.
NRGI said that resource rich countries that sell commodities, like Ghana and Nigeria, have also committed to pursue greater transparency in this area and EITI now includes related disclosure requirements on commodity trading. It noted that Guyana can do the same.
Further to this, NRGI spoke to the need for contract transparency. In this regard, it pointed out that many countries have adopted a policy to publish some or all of the contracts signed between the host government and the extractive company.
“For instance, Article 150 of the constitution in Niger requires the government to publish all new extractive contracts. The availability of contracts, even if they are not confidential per se, varies from country to country. ResourceContracts.org makes hundreds of resource contracts available to the public and the Open Contracting Data Standard creates a common contract data model to enable disclosure at all stages of the contracting process.”
NRGI also noted that mandatory payment disclosure rules are excellent transparency mechanisms. The Institute said that mandatory payment disclosure rules are legal requirements for companies to systematically disclose the payments they make to governments.
It noted that some countries make disclosure rules for companies involved in a contractual relationship with the government. It said too that other countries require disclosure for all companies that are listed on stock exchanges or incorporated within their country.
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