Energy Dept. developing Ethics Policy to strike out corrupt behaviour –Dr. Bynoe …Encourages National Assembly to draft same for MPs

Nov 11, 2018 News

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By Kiana Wilburg
In the interest of reducing the potential for corruption or even the mere perception of it in the oil sector, Head of the Energy Department, Dr. Mark Bynoe, revealed that an Ethics Policy is being developed to govern the behaviour of his staff members.
Dr. Bynoe was reminded that Guyana is without any piece of legislation that demands beneficial ownership screening. Many international and local experts have said that the absence of this legislation opens the floodgates for public officials to have an indirect investment power in companies involved in the oil sector, thereby leading to issues of corruption and conflict of interest.
Asked if his Department would be placing any focus on this, Dr. Bynoe said, “We are interested in anything that will reduce potential corruption or even the perception of corruption. So yes, that would be an area of interest. Also, we are developing an Ethics Policy going forward to cover the Department of Energy.”
The official said he would also encourage the National Assembly to craft something similar to for the nation’s Members of Parliament.
SCREENING TO REDUCE CORRUPTION
It has been over a year since the Natural Resource Governance Institute (NRGI), an independent transparency body, called on Guyana to put several measures in place to safeguard the nation’s wealth. One of these systems it recommended speaks to increasing beneficial ownership screening so as to reduce the sector’s risk to corruption.
The Institute noted that in most natural resource-rich countries, when a company is seeking the right to explore for or produce oil, gas or minerals, sector, rules require that regulators check some basic information before granting the company a licence and accompanying contract.
In this regard, NRGI said that the regulator is supposed to judge whether the company is technically competent, financially sound, and is in compliance with environmental and safety rules.
It noted, however, that licensing rules generally do not require screening of whether public sector officials have interests in an applicant company, which could create serious conflicts of interest.
The Institute said, “We reviewed over 50 mining and oil laws around the world and found that about half contained prohibitions on Government officials or their close associates – often called ‘politically exposed persons’ (PEPs) – holding interests in companies applying for extractives licenses, but none required regulators to actually check whether or not such PEP interests existed as part of screening licence applications.”
It added, “This is a potentially critical gap in regulatory oversight, because a large body of real-world cases suggests that the ability to hide a company’s true beneficial owner is a major enabler of corruption in the granting of extractive rights.”
In Guyana, there is no legislation or piece of regulation, which requires beneficial ownership screening.
NRGI has pointed out that a growing number of Governments are developing legal policies and information systems for collecting and publishing data about the beneficial owners of extractives companies – the real people who own, control, or economically benefit from a company.
It stressed that these reforms range from amending company registration laws and creating national public registers to sector-specific approaches like establishing extractives transparency laws and licensing requirements.
But to have an impact, NRGI said that extractive sector reforms may need to go beyond just requiring beneficial ownership disclosure, namely by establishing rules on what types of beneficial ownership linkages will be considered unacceptable self-dealing or corruption, and by determining the consequences that will apply when that line is crossed.
NRGI research shows that a number of countries have already established such rules, but monitoring and enforcement is lacking. Given the corruption risks, the Institute said that improving national policies and practices on allocating extractives licences should be at the forefront of these efforts.
Going forward, NRGI said that resource-rich countries such as Guyana will need to choose beneficial ownership assessment rules that best address the political, legal and industry realities in which they award licences.
Given the relative newness of evaluating corruption risks using beneficial ownership information in licensing decisions, NRGI said that officials may want to put much of the detail into less formal documents such as guidelines, so that the rules will be easier to amend based on lessons learned.
Regardless of where rules are stipulated, NRGI commented that they should be subject to public consultation during their development, and publicly disclosed once finalized in order to facilitate monitoring and accountability.

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