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Govt. ignores expert’s advice to complete oil policy before law review
By Kiana Wilburg
Before building a house, it is elementary knowledge that one needs to have a plan which outlines the desired number of windows , toilets and bathrooms, whether there is going to be a large or small kitchen, marble floors, etc.
Energy Strategist, Anthony Paul, handing over the report back in 2016 to
Natural Resources Minister, Raphael Trotman. At centre is UNDP Resident Representative, Mikiko Tanaka.
Once there is a plan for the dream home, the potential homeowner will most likely go to the bank for a loan to cover expenses. With the money in hand, the contractor would be called in to get started. This is the normal sequence of events. No right thinking person would take a loan from the bank, call in a contractor and not have a plan in place.
But this is exactly what the Government of Guyana did. It took a US$20M loan from the World Bank and used a portion of it, US$1.2M to be exact, to hire an American law firm, Hunton, Andrews, Kurth LLP to review the nation’s laws. It contracted the law firm with no widely consulted policy in place which states what Guyana wants to achieve.
What is also astonishing is that Guyana was advised since 2016 to ensure a policy is in place before moving to law reform. Taking the actions of the Government, specifically the Energy Department into account, it appears that the advice that was paid for by the United Nations Development Programme (UNDP) was perhaps a waste of time.
Back in 2016, the UNDP had hired Energy Strategist, Anthony Paul, to conduct an analysis of Guyana’s oil industry. His report showed all the dangerous loopholes Guyana needed to plug.
The Energy Strategist noted that Guyana’s old laws required urgent review. But before doing so, he noted that a National Upstream Oil and Gas Policy must be put in place. Paul also noted that Guyana had a draft policy that was stuck in that stage since 2013. The Commonwealth Secretariat had done some work to upgrade the document but it has not been released to the public for scrutiny.
It should be noted that there are more than 40 references in Paul’s Rapid Analysis Report which highlight the importance of having a Petroleum Policy in place.
Other international industry experts who have taken a keen interest in Guyana’s approach to industry reform have also zeroed in on the absence of a petroleum policy. One such person is Energy Lawyer, J. Jay Park.
During a recent webinar session, Park said it behooves the government to focus on what it wants to achieve by way of a policy, and then it can move to amend the law, followed by writing more detailed regulations. Once that is done, Park said the country can move on to creating a better petroleum agreement and go about further awards on a more competitive basis.
Park had said that the principles of such an effective policy speak to transparency, efficiency in petroleum activities, maximizing local benefits, and protecting the environment. Park believes these are key features that should be part of the policy, part of the law, and part of the regulations.
Further to this, the international lawyer explained that these features are important and desirable in order to avoid the resource curse which is often called the paradox of plenty. This he said, is where many states have lots of oil resources but they fail to prosper.
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