Extractive Industries especially vulnerable to abuse, illicit enrichment - EITI report

Extractive Industries especially vulnerable to abuse, illicit enrichment – EITI report

Jun 25, 2022 News

Kaieteur News – The Extractive Industries Transparency Initiative (EITI), a global watchdog for the governance of oil and gas and mineral resources, in its 2022 Progress Report on Guyana, has outlined that oil contracts and the granting of licenses to permit such operations can result in citizens of a country being deprived of what they are owed financially.
The EITI Progress Report was launched on June 14, last ahead of the organization’s 53rd Board Meeting.
In the document, the transparency organization specifically highlighted that “Corruption is a pressing challenge for many resource-rich countries and a priority area for the EITI.”
It cited a statement made by the Organization for Economic Co-operation and Development (OECD), that one out of five cases of transnational corruption is linked to or directly occurs in the extractive sector.
As such, the report sought to put country leaders on notice that their citizens can be deprived of revenue through the licensing process, contract negotiations and even uncertainties in company stakes.
According to the 2022 EITI Progress Report, “Opacity in company ownership structures, licensing processes, contract negotiations and transactions can make lucrative extractive projects especially vulnerable to abuse or illicit enrichment, depriving citizens of the revenues they are owed.”
The body said, while there is a shared view among stakeholders that addressing corruption risks is implicit in implementation of the EITI Standard, the EITI Board recognised a need to clearly articulate the EITI’s role in deterring corruption and mitigating corruption risks.
To this end, the EITI said that back in December last, it issued guidance for multi-stakeholder groups to identify and address corruption risks through EITI implementation.
Several countries have also integrated anti-corruption activities in their work plans, including Burkina Faso, Mongolia, the Philippines and Togo, the report explains.
Locally, members of civil society as well as the political Opposition, has chided the government for renewing the operations of US oil major- ExxonMobil- at the Liza One Field, without securing more revenue for the citizens of the country.
In fact, even international experts were lobbying the leaders to use the renewal of the license to rake in more value for its people.
The Opposition Leader, Aubrey Norton, after the environmental permit was renewed told Kaieteur News in an invited comment that the Government of Guyana has missed an opportunity, in keeping with the law, to secure better terms for its people, by failing to exploit the renewal of the Liza One Permit.
According to Norton, “the opportunity was provided that it be done within the law, and the opportunity should have been taken. Unfortunately, the government didn’t take it and the Guyanese people will suffer because of government’s inaction on a matter in which conditions conducive to dealing with the issue existed but the government did not utilise it.”
The Leader of the Opposition was also keen to note that while he believes in the sanctity of contracts, the Liza One Permit could have been used to rake in a better deal, without touching the Production Sharing Agreement (PSA) government signed in 2016 with the oil company.

Discover more from Kaieteur News

Subscribe to get the latest posts sent to your email.

Latest News