Regulatory and political capture

Jan 10, 2021 Editorial

---

Kaieteur News – Something catastrophic occurred a while back that led to the deaths of hundreds of civilians. In eerily similar circumstances, two Boeing Max 737s crashed soon after takeoff, one killing 157 people travelling from Ethiopia and another killing 189 after leaving Indonesia in good flying conditions. These are a few of the barebones statistics from a lengthy article in the BBC’s online edition titled, “What went wrong inside Boeing’s cockpit?” (BBC, May 17, 2019). The most relevant question is what went wrong before anyone got onboard those Boeing Max 737 planes, the answers to which should open eyes in this country, on how business is conducted at elevated levels.
The assertion is that something called ‘regulatory capture’ was at work and that it bedeviled the work of the US Federal Aviation Authority, a most vital watchdog over Boeing, so much so as to render it toothless, and Boeing dangerous to the public’s interests, the first of which is safety. Regulatory capture is defined as when a state agency’s relationship with the industry it oversees becomes too close for comfort; instead of acting primarily in the interests of the public, it allows the business to call the shots.
This was also part of the critique issued by U.S. Senator, Richard Blumenthal, who said that the FAA had “decided to do safety on the cheap… and put the fox in charge of the henhouse.” In other words, too much of the safety work on the plane had been outsourced to Boeing itself. In the rush to produce the new Max 737aircraft, critical safety features had been disregarded. A former head of the US Department of Transportation, Mary Sciavo, noted that she oversaw an audit of the FAA’s work relating to the Boeing 777, and concluded that the bulk of the work was done by Boeing itself, with little real oversight. “At the FAA, they know they’re outgunned by Boeing,” she said. “They know they don’t have the kind of resources they need to do the job they’re tasked with doing. They pretend to inspect, and Boeing pretends to be inspected, when in fact Boeing is doing it all almost entirely by itself.”
Though Guyana’s Environmental Protection Agency is one of the most critical places that is under sharp scrutiny that is the wrong place to start, for it is being held hostage by men far more powerful, more resourceful, and more ruthless. All roads lead there and all starts rightly begin in political circles.
In view of the continuing charades that goes on here with Guyana’s oil, what we have is not so much regulatory capture, but political capture. Guyanese have to wonder why government after government, which all come down hard on citizens and take no prisoners are without answers, without muscle, without pride, and without the willpower necessary to stand up to ExxonMobil and say: stop! Enough of this nonsense! What we have here is not working, and we need to talk. Instead, regular Guyanese have been left openmouthed at the apparent impotence and cowardice of local leaders, whether the current ruling PPP government or the prior coalition regime or the one before that (also PPP). It has been a case unlike that of the Biblical David and his slingshots confronting the tormenting giant; but of one with crawling around on hands and knees to pay it (Exxon) homage in every which way that the company deems possible.
In Guyana’s scenario of political capture and leading political figures jumping to Exxon’s whim, no information is forthcoming from the government of the day, no laws are revised, no independent parties are recruited to oversee critically what Exxon is doing in sensitive areas. Unsurprisingly, there is no inclination or movement for the national togetherness that is absolutely mandatory, through political partnership and civic engagement. Instead of powerful, feared, and respected Guyanese political watchdogs (sentinels) prowling the perimeters on behalf of the people, what we have had is, one toothless poodle after another signaling their friendliness by rolling over to have their bellies tickled.
To be sure, we have material lack of expertise in many fields of petroleum management ranging from wellhead to oil accounting and auditing to environmental protection. It may be embarrassing, but the question should be asked (for which Exxon already knows the answer): What work in which area is there that Guyana can do competently enough to turn around and challenge Exxon, and say not here?
We outsource auditing. We outsource legal work. We have to outsource consulting and advisory services relative to this country’s oil wealth. Bottom line: there are few oil-related things in very few spaces that we can do by ourselves, which leads to dependency on outsiders. Exxon knows this all too well, and because of that, we pay prices for things and what we know not. There’s no question, Boeing does have tremendous economic clout. The same can be said for Exxon worldwide, and particularly in Guyana today, which is way behind the clock and in points on the kind of skills and expertise to offer the degree of pushback to Exxon in most fields. One area, in which there are glaring weaknesses, is in protection of the environment with the coming of oil.
The truth must be faced, Guyana’s EPA does not have what it takes to make things right, to even offer feeble resistance against a behemoth like ExxonMobil. And when it does make a pedestrian attempt to do either, the Guyana government has ensured that its arm is short, and its muscle not flexed in any alarming manner. The government got rid of the one man, who could have possibly made a difference, while leaving those more familiar with the limited confines of Guyanese industrial and other practices in charge of the shop. Truth be faced, the local EPA is severely handicapped, perhaps deliberately so, in any confrontation with Exxon. It can’t even get off the ground. We offer its bewildering position on Environmental Impact Assessments, which according to the EPA’s record, are not needed, regardless of what is involved.
To help understand this some more, here is a real-life set of circumstances, which should make Guyanese understand how the Boeings and Exxon(s) of the world operate. Barbara Lichman, an aviation lawyer and former Washington lobbyist, says firms of this size know how to work the political machinery to its advantage. “Companies of that size have very proficient lobbyists,” she says. “They hit Congress very, very hard, and put pressure on them to relieve pressure on the company.” In the context of Guyana, this means Exxon’s pressuring the Guyana government, so as to compel its head honchos to eat out of its hand and jump to its command. When observant Guyanese pay attention to the current government, there already is some degree of headshaking as to how dumb and clumsy it looks in the face of Exxon. Look at how the EPA is reduced to a skulking shadow, how ruling and opposition politicians do wonderful imitations of year-round masqueraders, and how far both leading political groups are willing to go to like emasculated and inoffensive.
This is the essence of political capture, and it is manifested daily by government big shots. This is what Guyanese, including those that put-on blindfolds, cannot help but seeing. Where this oil of ours is concerned, may God in His goodness help us!

---

---