‘Contract with Exxon makes a mockery of our constitution’

Jun 27, 2022 News

– Yog Mahdeo says deal attempts to shackle govt. into more unfair provisions

By Davina Bagot

Kaieteur News – The Production Sharing Agreement (PSA) that the government signed with US oil major ExxonMobil is a mockery to the country’s constitution as it attempts to shackle this country into more unfair provisions or benefits for the petroleum companies operating in Stabroek Block.

Transparency activist, Dr. Yog Mahadeo

This is the view of Dr. Yog Mahadeo, a transparency advocate and co-founder of the civil society body- Article 13. He gave this conclusion in an invited comment yesterday while citing the necessity for the contract to be renegotiated.
Mahadeo explained, “Of critical importance to me is the fact that we have not only allowed the Exxon contract to remove our wealth but are allowing them to effectively remove our constitutional right to elect a government that can create and enact laws on our behalf – that is, the contract mocks and neuters our Parliament’s ability to pass laws.” According to him, the PSA attempts to shackle the Government into financial and other lopsided deals. “It also attempts, in Article 32, to handcuff the Government away from contemplating changing any laws that can impact the Agreement to the economic detriment of the Contractor. By attempting to shackle the Government, it therefore attempts to fetter the entire population from getting a Government in place that can pass laws as desired by and for the people. This unconstitutionality threatens our right to elect a Government that will make the right decisions on our behalf.”
Article 32, which lists out conditions for ‘Stability of the Agreement’ states at 32.1 that “Except as may be expressly provided herein, the Government shall not amend, modify, rescind, terminate, declare invalid or unenforceable, require renegotiation of, compel replacement or substitution, or otherwise seek to avoid, alter, or limit this Agreement without the prior written consent of Contractor.”

Section 32 of the oil contract that ‘mocks’ the laws of Guyana, according to Mahadeo

The agreement goes on to say at 32.2 that “after the signing of this Agreement and in conformance with Article 15, the Government shall not increase the economic burdens of Contractor under this Agreement by applying to this Agreement or the operations conducted thereunder any increase of or any new petroleum related fiscal obligation, including but not limited to, any new taxes whatsoever, any new royalty, duties, fees, charges, value-added tax (VAT) or other imposts.”
The advocate pointed out that a clear example of this case is seen in the matter where Guyana’s Attorney General and Minister of Legal Affairs, Anil Nandlall S.C is representing the Government alongside ExxonMobil against Kaieteur News Publisher, Mr. Glenn Lall who has challenged the “discriminatory” tax holidays being enjoyed by the oil company.
As such, Mahadeo noted that the contract is not only lopsided due to the unfair benefits to the people of Guyana, but also due to the terms outlined that seek to block the passage of new laws that can affect the company’s profits. He argued, “It is also bad for us as Guyanese because it exemplifies how close the People’s Progressive Party, the People’s National Congress and the Alliance For Change are all on this, defending each other’s position and doing everything to make a wrong look and feel right. [Vice President Bharrat] Jagdeo, [President Irfaan] Ali et al. were well aware of the Contract’s terms and conditions when they made the election promise to renegotiate. They either blatantly lied to the people then- before elections- or are lying now that they are the prime beneficiaries of all the oil revenues since they direct, at will, the use of these funds and the preservation of Exxon’s Contract against us.”
According to Mahadeo, the main terms used in the 2016 contract mirrors terms and conditions in the 1999 contract, meaning that the present administration was well aware of what they were getting into when the promise was made to renegotiate the deal.
The co-founder of the civil society body has launched a series of protest action calling on the government to honour its campaign promise to renegotiate the deal. Last Tuesday, the group took to the streets demanding a renegotiation. The exercise, in front of the Ministry of Natural Resources’ Duke Street, Kingston, Georgetown office was held by the citizens to publicly register their disapproval of the contract. Mahadeo said that the protest is slated to continue today at 11:30am; however, the venue was not finalized up to press time.