The Gift!

Aug 20, 2021 Features / Columnists, Peeping Tom

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Kaieteur News – Look, those who wish to have their intelligence or common sense insulted can go ahead and believe that the US$18M paid by the oil companies was represented as a gift and not a Signing Bonus. I am not buying that neither by hook, by line or by sinker.
If there was the belief that the monies paid were for the legal fees for Guyana’s prosecution of its claim before the International Court of Justice and for training, then why was this sum kept secret?
Why this sum was not made public? In addition, if it was indeed perceived as a gift for legal fees and training, then should it not by law have been placed into the Consolidated Fund, in accordance with the law?
The Fiscal Management and Accountability Act provides that all monies received by the government shall be credited fully and promptly to the Consolidated Fund, except for moneys credited to an Extra-Budgetary Fund as stipulated in the enabling legislation establishing that fund, or moneys credited to a Deposit Fund.
The monies were not placed into an Extra-Budgetary Fund created by statue. And it was not put into any Deposit Fund either. The Fiscal Management and Accountability Act states that a Deposit Fund is a fund created by the Minister. The Minister may establish one or more Deposit Funds into which public moneys shall be paid pending repayment or payment for the purpose for which the moneys were deposited.
However, once a Deposit Fund is established, the Minister has a statutory duty to notify the National Assembly of the Deposit Fund, the source of the money and the purposes for which it is expended, the banking arrangements for the Deposit Fund and the intended investment strategy for the Fund. None of these was done and therefore the monies could not have been credited to any Deposit Fund.
Even if, by some stretch of the imagination, one is inclined to give the former Minister of Finance the benefit of the doubt that he did believe that the US$18M was a gift and not a Signing Bonus, then perhaps he should explain whether he ever enquired as to the status of the Signing Bonus.
The Production Sharing Agreement with ESSO, HESS and CNOOC, which was signed in 2016, clearly states that, “The Contractor shall pay the Government a Signature bonus of eighteen million United States Dollars (US$18,000,000.00). Such payment will be made within a period of fifteen (15) Business Days after the Effective Date, or such earlier date as agreed amongst the Parties. Such payment shall be made to a bank account within the Bank of Guyana, which is owned by the Government as designated in writing by the Minister of Finance of the Government. Contractor shall verify such bank accounts and the Minister agrees to cooperate, assist and provide the Contractor with any information it requires to conduct such verification.”
It is clear from the terms of the Production Sharing Agreement that Exxon was obligated to pay the Signing Bonus within two weeks of the Effective Date of the PSA agreement. The Minister of Finance is not a disinterested party in this matter. He is required by the agreement to designate in writing the bank account into which the monies is to be paid. He is also mandated to provide information, for the purposes of verification of the Signing Bonus to the Contractor and upon the Contractor’s request – the Contractor in this case being the oil companies.
One therefore has to ask, if it was the belief that the US$18M which was paid to the Government was a gift for the payment of legal fees and training, did anyone ask what about the Signature Bonus?
Given the recent pronouncements made, the PPP/C administration now has firmer grounds to launch an inquiry into the Signature Bonus and its payment, including who was the negotiator. While the PPP/C is at it, it should examine the Cabinet records of the APNU+AFC administration to determine if prior to the PSA being signed, Cabinet had authorised any such agreement.
A Petroleum Advisor to the then APNU+AFC President had said that when he told President Granger about the agreement, he appeared surprised. So was the Production Sharing Agreement signed behind the back of President Granger and his Cabinet?
The nation needs to know. The PPP/C has an obligation to let them know and to investigate whether there were any breaches of the law in relation to the non-payment of the US$18M into the Consolidated Fund?
Will the PPP/C undertake such an investigation? Or would such a violation be considered by the PPP/C as a violation of the sanctity of contracts?

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

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