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Two years after advice from UNDP … Guyana still to fix legislative, institutional weaknesses that will affect oil and gas sector
By Kiana Wilburg
In 2016, the Government of Guyana received a crucial report from the United Nations Development Programme (UNDP) which outlined the legislative and institutional weaknesses that would affect the success of the emerging oil sector.
Two years later, there has been no movement from the government on the report that was written by Anthony Paul, Principal Consultant of the Association of Caribbean Energy Specialists Ltd.
The report notes that there are several laws and regulations which need updating. These include: the Guyana Geology and Mines Commission Act; the Mining Act; the Petroleum Exploration and Production Act, No 3 of 1986; the Petroleum Exploration and Production Act Regulations, 1986; the Petroleum Exploration and Production Act, 1998, Chapter 65:10; the Environmental Protection Act; and the Occupational Safety and Health Act, Chapter 99:01.
Paul in the report said that the legislative and institutional frameworks in Guyana are, not surprisingly, unprepared for managing the petroleum sector in its current phase of development. The Principal Consultant said that both the legislative and institutional frameworks and their component parts are critical for successful management of the resource. He opined that given the pace of change, Guyana is at risk of losing very significant value unless the gaps identified are closed rapidly.
Paul said, “In order that Guyana maximizes the benefits available from oil and gas, while mitigating the possible negative impacts, a customized governance framework, including the legislative and institutional components, is a necessary ingredient for success. That said, the approach to designing them can follow an intuitive approach, which can stand the test of time, if properly designed, built and maintained, while adhering to the key principles of good governance.”
Anthony Paul, Principal Consultant of the Association of Caribbean Energy Specialists
The Oil and Gas Consultant continued, “Experiences from other countries will influence the processes involved in developing an appropriate legislative framework and a world class regulator. These experiences tell us that a governance framework requires that the policies, legislation and institutions must be designed, set up, operated and overseen in a manner that is inclusive, transparent and accountable.”
He added, “To be effective, these require that a monitoring, review, reporting and revision mechanism is built into the system and not left as an afterthought or to the whims and fancies of future governments or regulators. One danger in not implementing this mechanism is that, as things change and in the absence of new systems, decision making is ad hoc and the quality of decisions and outcomes are entirely dependent on the capacity and independence of the regulators.”
INSTITUTIONAL FRAMEWORK
A robust and proactive regulatory body is a central part of the institutional framework that Guyana would need for its petroleum sector. Paul and other international advocates of good governance have made this point time and again. In fact, Executive Director of Agency for Security, Energy and the Environment (ASEA) of Mexico, Carlos De Regules was keen to support this position as well.
He told Kaieteur News that Guyana’s institutional framework, particularly its regulatory body for the sector must be independent. It must be free from any instance of political interference.
The Executive Director of ASEA said, “So before achieving full scale development of the oil and gas resources, Guyana has the opportunity to create an institutional framework that make the sector stakeholders operate in a responsible manner…”
The Mexican official added, “But I can’t stress enough that one of the ingredients of this institutional framework will be astute and honourable regulators. One of the characteristics of a good regulator is independence. You want regulators who are defining the rules for the long run, to be independent from the political cycle. They should also be financially independent so they can plan for the long term and have the resources to do so.”
The Oil and Gas Expert said that the sooner Guyana can have strengthened systems for environmental regulation in place, then it would be better off in terms of managing the sector.
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