No more delays, publish all contracts for Guyana’s natural resources –Dr. Mangal

Jan 03, 2019 News

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By Kiana Wilburg
The release of several petroleum agreements was a good start. But it should not stop there. The Government needs to continue publishing contracts for all of Guyana’s natural resources.
This view is shared by several international and local proponents for transparency and accountability. Former Oil and Gas Advisor to the Government, Dr. Jan Mangal is one who recently expressed these and other sentiments during an exclusive interview with Kaieteur News.
Dr. Mangal said, “The government published most of the oil contracts but they need to publish all contracts for natural resource such as gold, timber, diamonds, etc. Guyana’s natural resources belong to the people of Guyana…”

Further, Open Society Foundation, a UK based organization that financially supports civil society groups, has denounced the government’s piecemeal approach to contract disclosure.
In fact, the UK firm notes that if the overarching goal of the coalition administration is comprehensive transparency and accountability in the governance of natural resources, then it will publish all the contracts.
It said, “Governments ought to disclose the terms and counterparties of all natural resource deals to allow legislators and citizens to monitor whether the laws and regulations are being followed and to assess the quality of deals being made on their behalf.”
The Open Society Foundation noted that the International Monetary Fund’s (IMF) ‘Guide on Resource Revenue Transparency’, and the Natural Resource Charter, consider publication of contracts to be best practice.
Further to this, the Foundation said that the fullest possible information that needs to be disclosed to Guyanese relate to the granting of each concession, pre-qualified companies, successful and unsuccessful bids, and the identity of the beneficial owners.
It also recommended that Guyana establishes an independent public agency that has oversight of the rights and the implementation of contracts. It believes that such a body could also make regular and timely public reports on any anticipated and concluded allocation of natural resources licences.
The Foundation in conclusion cautioned, “Citizens can only be confident about the integrity of the resource extraction process if they know about it.”

Head of the Guyana Extractive Industries Transparency Initiative (GY-EITI), has also noted that the release of all contracts is something that citizens are in support of. He even said that at several GY-EITI consultations, one of the major topics of discussion was the need for the government to release all natural resource contracts.
Dr. Jadoopat said that during those consultations, citizens were informed of the EITI rules and regulations governing contract disclosure. Jadoopat cited EITI’s Standard 2.4 (a) and (b) clauses which state how disclosures are supposed to be made by implementing countries.
According to EITI’s website, Standard 2.4 says, “2.4 Contracts. (a) Implementing countries are encouraged to publicly disclose any contracts and licenses that provide the terms attached to the exploitation of oil, gas and minerals.
b) It is a requirement that the EITI Report documents the government’s policy on disclosure of contracts and licenses that govern the exploration and exploitation of oil, gas and minerals. This should include relevant legal provisions, actual disclosure practices and any reforms that are planned or underway. Where applicable, the EITI Report should provide an overview of the contracts and licenses that are publicly available, and include a reference or link to the location where these are published. https://eiti.org/document/standard.”
While GY-EITI seeks to encourage contract disclosure as stated in the EITI Standard, this is not supported in Guyana’s laws.
Jadoopat said that the Government in some cases, has no choice but to respect the laws.
He said, “Government has to observe the local laws on contract disclosure. However, we will continue to encourage and advocate for the change of these laws. We hope that happens. We will try to influence the process in that direction within the capacity we operate in.”
The official emphatically stated that the body will push until contract disclosure becomes law.

REVENUE WATCH
Revenue Watch, a non-profit policy institute that promotes the responsible management of oil, gas and mineral resources for the public good, has also called for there to be the practice of contract disclosure in Guyana and other emerging oil producers.
The grant-making organization has noted that Governments must be held accountable for all contracts they enter, be they for the provision of roads or the purchase of goods. And when the contracts concern non-renewable resources, Revenue Watch said that the need for scrutiny is even more pressing. In this light, it said that the growing interest in mining, oil and gas contracts on the part of concerned citizens around the world makes a great deal of sense.
Given the history of government corruption and mismanagement of extractives, along with the environmental degradation, community displacement, violent conflict, and human rights abuses, Revenue Watch said it is no wonder that the calls for better government management of and more corporate responsibility in the extractive industries have never been louder.
Revenue Watch argues that contract transparency is critical to addressing better resource management and bringing contract stability to an industry that is notorious for corruption.
It said, “Over the long term, Governments will be able to negotiate better deals, as the information asymmetry between governments and companies closes. In the shorter term, contract transparency will help government agencies responsible for managing and enforcing contracts, of which there are many, work in tandem. With contracts publicly available, government officials will have a strong incentive to stop negotiating bad deals, due to corruption, incompetence, or otherwise.”
Revenue Watch continued, “Citizens will better understand the complex nature of extractive agreements if they are out in the open and explained by the contract parties. States and companies may not be hiding anything of great import, but so long as contract disclosure is scattered and leaked materials suggest hidden horrors, that perception will persist—providing easy fodder for demagogues and politicians to make calls for expropriation and renegotiation in cases where it is not merited.”
The organization added, “Furthermore, contract transparency will result in more stable and durable contracts, both because they are less subject to the population’s suspicions and because the incentives for governments and companies to negotiate better contracts will be increased.”
In short, the organization said that contract transparency is a necessary element of any effort to promote the responsible management of natural resources for growth and economic development.

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