Loopholes in new oil Law give Govt. free rein with oil money

Jan 08, 2023 News

– Investment Committee, Board of Directors, and Parliament rendered toothless poodles

Kaieteur News – When money is withdrawn from the Natural Resource Fund (NRF) to support the Government’s budgetary agenda, who or what Committee is empowered to determine its use? Which Committee is responsible for outlining what national priorities it must be spent on?

A perusal of Guyana’s Natural Resource Fund (NRF) Act shows that the Board of Directors, the Investment Committee, or even the Public Accountability and Oversight Committee is NOT vested with that role.

President, Dr. Irfaan Ali

With such a loophole, the Government has free rein to swoop in and have full control. With a majority lead in Parliament, it also has no worry about final approval for spending. As an added sweetener, there are no provisions to compel the Government to report what specifically the oil money is being spent on.

The first demonstration of the above occurred in February 2022, when the House approved US$607.6M to be withdrawn to support the Administration’s budgetary measures.

Kaieteur News previously reported that the first tranche totalling US$200M of the US$607M was withdrawn on May 10, 2022. (https://finance.gov.gy/government-makes-first-withdrawal-from-the-natural-resource-fund/). The second withdrawal of US$200M was done on July 13, 2022.

It was only until August 30, 2022, that President Irfaan Ali awarded Letters of Appointment to several Guyanese to serve on the Natural Resource Fund (NRF) Board, the Public Accountability and Oversight Committee, and the Investment Committee.

On the NRF Board, Major General Joseph Singh, MSS serves as Chairperson. He is supported by Former Foreign Affairs Minister and Permanent Representative of Guyana to the United Nations, Carolyn Rodrigues-Birkett, Professor Compton Bourne, O.E, former Parliamentarian, Mr. Dunstan Barrow, and long standing member of the Private Sector Commission, Mr. Ramesh Dookhoo.

With respect to the Investment Committee, Executive Director of the Georgetown Chamber of Commerce and Industry (GCCI), Richard Rambarran, Attorney-at-Law, Michael Munroe, and Chartered Banker, MBA Ms. Shaleeza Shaw are among the serving members. Shaw serves as Chairperson. Mr. Lauris Hukumchand, who is currently overseas, will be appointed at a later time.

As for the Public Accountability and Oversight Committee (PAOC), the following persons were selected to serve: Mr. Clement Sealy (Chairperson), Mr. Abu Zaman, Mr. Ryan Alexander, Attorney-at-Law Teni Housty, Mr. Dawn Gardener, Pastor Wendell Jeffery, and Aslim Singh.

According to the NRF Act 2021, the Board of Directors is tasked with several critical responsibilities. These include: overall management of the fund, reviewing and approving policies of the fund, monitoring performance, ensuring compliance with approved policies, exercising general oversight of all aspects of the operations of the Fund; and ensuring that the fund is managed in compliance with the Act and other applicable laws.

While it is responsible for putting together an investment mandate, this role is circumscribed by what the mandate must entail as specified in Section 27.

This part of the law states that the investment mandate shall include directions relating to the management of credit, liquidity, operational, currency, market, and other financial risks; ethical investments including policies, standards and procedures for avoiding prejudice to Guyana’s reputation as a responsible member of the world community, along with any other eligible assets as the minister deems fit.

Noteworthy is the fact that the investment mandate is subject to the approval of the Finance Minister.

Given the provisional powers and loopholes in the Law, the PPPC Government has the power to spend the oil money how it deems fit, with no true check or balance on where the money goes.