Govt. to dominate oil fund committees

Dec 17, 2021 News

– President, Minister to make all appointments

– no place made for media, transparency groups

Kaieteur News – The amendments to the legislation governing the Natural Resource Fund (NRF) which were tabled on Thursday in the National Assembly by Finance Minister, Dr.

President Irfaan Ali

Ashni Singh, propose that there be two key committees and a Board of Directors to preside over the management of the nation’s oil money.
Importantly, all of the members on these committees as well as the Board will be appointed by the President or his Minister responsible for natural resources.
As part of the governance structure for the NRF, the government proposes to establish a Board of Directors which shall comprise of not less than three and not more than five persons who shall be appointed by the President, and one of whom shall be appointed Chairperson by the President.
The amended Bill proposes that the directors be selected from among persons who have wide experience and ability in legal, financial, business or administrative matters. It was noted that one of the Board members shall be nominated by the National Assembly along with one from the private sector. The Bill states that the directors shall be appointed for a period not exceeding two years and shall be eligible for reappointment.

Minister of Natural Resources, Vickram Bharrat

It is being proposed that the appointment of the directors and every change in appointment shall be published in the Official Gazette, on the website of Ministry of Natural Resources and in two daily newspapers circulating in Guyana.
With respect to its functions, it is being proposed that the Board be responsible for the overall management of the Fund, reviewing and approving policies of the Fund, monitoring the performance of the Fund, ensuring compliance with approved policies, exerting general oversight of all aspects of operations, and ensuring the Fund is managed in compliance with the Act and other applicable laws.
The Board would also be responsible for preparing the investment mandate. It was noted that when preparing or amending the mandate, the Board would have to seek the advice of the Investment Committee, be assisted by the Senior Investment Advisor and Analyst of the Fund and enter into an operational agreement with the Central Bank for the operational management of the fund.

Finance Minister, Dr. Ashni Singh

Apart from the Board, there would also be an Investment Committee which shall have seven members appointed by the Minister of Natural Resources. They will include nominees from the Minister of Finance, Minister in charge of the oil sector, the Attorney General, Leader of the Opposition, the Private Sector and two ex officio non-voting members: the Senior Investment Advisor and Analyst and a nominee from the Governor of Bank of Guyana.The Committee would be required to take account of the current conditions, opportunities and constraints in the relevant financial matters, the principle of financial diversification with the objective of maximizing risk-adjusted financial returns and taking into account the capacity of the institutions involved in the management of the fund and the nation’s ability to bear financial risk.

As for the Public Accountability and Oversight Committee, Kaieteur News previously reported Vice President, Bharrat Jagdeo, as saying this would not be preserved in the amended law since 22 members would make it nearly

Vice President Bharrat Jagdeo

impossible to run the fund. Based on the amendments, the government has kept a revised version of the body which includes nine members, all of whom will be appointed by the President. They will include one nominee from the National Assembly, two from the private sector, two from organized labour, one from the professions and three from the religious community.
Importantly, there is no place for media and transparency groups which were catered for in the original legislation. The amended legislation is expected to be debated and passed before year-end.

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