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Vibrant debate in media underscores citizens’ outrage at secretive practices in oil, mining sectors – EITI

Sep 20, 2022 News

Kaieteur News – Following its latest evaluation of Guyana’s adherence to its standards, the Extractive Industries Transparency Initiative’s International Secretariat said it has observed a most vibrant debate in the local media as regards practices in the oil and mining sectors. In particular, the Secretariat said there is a noticeable degree of outrage for the secretive management of these critical revenue earners.

In its latest report, the EITI body said the public debate in the press is an indication of the challenges facing Guyana’s extractive industries which include ensuring transparency in oil and gas production and exports, the fiscal terms governing mining contracts, and the environmental impacts of extractive projects and artisanal and small-scale mining.

The international watchdog said there are thousands of active mining licenses in Guyana, but only a dozen licenses in the more recent oil and gas industry. It noted however that there is no publicly accessible cadastral portal for mining or oil and gas licenses in Guyana, as existing license registers appear to be maintained for internal ministry purposes at present.

It was keen to note that Guyana’s EITI reporting has added value by providing the only public source of basic information on the licensing regime and license grants in the two industries. Be that as it may, the Secretariat said Guyana’s EITI reporting has included limited disclosure on oil and gas licensing, including for instance clarifying the statutory technical and financial criteria assessed in oil and gas block awards and transfers.

It noted also that there has been a de facto cessation of awards of new licences in the oil and gas sector since 2017, which was effective during the period under review (2018). In spite of this, the international body said Guyana has not used its EITI reporting to disclose transfers of participating interests in oil and gas blocks, of which at least one took place in 2018.

In the mining sector, the Secretariat said there continued to be significant licensing activity, with 252 mining license awards and 75 license transfers in 2018 alone. It should be noted that Guyana’s EITI reporting has not undertaken more thorough legal analysis to highlight inconsistencies across different legislation governing mining license awards. Additionally, there is no evidence that those stakeholders responsible for keeping tabs on Guyana’s management of the sectors, have not sought to use EITI reporting as a diagnostic of actual licensing practices to date. They have also not pursued any assessment of deviations from statutory procedures in licensing practices since Guyana became a candidate in October 2017.

Furthermore, EITI’s Secretariat pointed out that there appears to be significant public interest in licensing practices in the mining sector, on the part of both civil society and industry given alleged irregularities in license awards.

In fact, several stakeholders consulted the transparency group said they believe the process for extractive license awards remained opaque and expressed concern that large oil and gas blocks had been awarded without adequate public oversight of the process.  In mining, there was also concern expressed over the award of overlapping licenses for different land uses.

The Secretariat’s assessment is that Guyana did not fully comply with EITI Requirement 2.2 which requires implementing countries disclose information about license awards and transfers that take place during the accounting period covered by the EITI reporting cycle. This information is expected to include a description of the process for awarding and transferring licenses, the criteria used, as well as deviations from the legal framework and policies on license allocations. Disclosures may also include additional information on the licensing process, such as commentary on the efficiency and effectiveness of these systems.

The country has since been urged to take a suite of correction actions to be in compliance with EITI’s standards.

 

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