The truth is staring Jagdeo in the face

Feb 12, 2023 Features / Columnists, Peeping Tom

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Kaieteur News – You can run but you cannot hide from the truth. Videos have surfaced showing both the President and Vice President condemning the oil agreement which was signed by the APNU+AFC and both saying that the agreement will be renegotiated.

These are the exact words of the Vice President when he was in Opposition: “They [APNU+AFC] sold us out to the foreigners – the oil companies. Every time there is a find there, our people should be sad because nothing comes our way. We are going to renegotiate those contracts because that’s not what we had in mind. When we were in the early days we were coaxing the people (ExxonMobil and partners) to go along. They (APNU+AFC) came into office (and met) 3 billion barrels of proven reserves and then gave up zero royalty, no taxes, no ring-fencing, no local content for these people to spend any money here.”

When he became Vice President and was assigned responsibility for the Natural Resources sector, he adopted the opposite position. Instead of pressing for renegotiation, he became the chief defender of the position that the government has to respect the ‘sanctity of contracts’ and that only future agreements would be subject to revised terms.

This was a back peddling at its best. Jagdeo has been made to eat his own words. Jagdeo must explain to the Guyanese people why it is that he has adopted a posture in complete opposition to the stance which he took when he was Opposition Leader. He must explain why he berated the APNU+AFC for the sell-out deal it signed with the oil companies and now is refusing to renegotiate that deal.

He cannot be unaware that contracts have been renegotiated in other countries. And he must have been aware that it is possible in consensual arrangements for contracts to be renegotiated.

Contracts are supposed to be made in good faith. And that principle extends to renegotiation. It is therefore permissible for a government to enter into negotiations for the revision of a contract to meet changing circumstances and exigencies, even if one of the parties does not agree to renegotiation.

The Production Sharing Agreement signed between Exxon, Hess and CNOOC makes provision for the contracts to be renegotiated with the consent of the oil companies. So Jagdeo must tell the nation whether his government has ever approached the oil companies, expressing its concern over the terms of the original contract, and if the oil companies have declined to renegotiate. He must also indicate whether the government, in respect to this issue, has exercised the option of placing the matter before arbitration as if provided for in the contract where there are disputes.

One international lawyer, Melinda Janki, has pointed out the principle of ‘sanctity of contracts’ does not collide with renegotiation. What the ‘sanctity of contracts’ prevents is one party opting to change the terms of a contract without the consent of the other. It does not mean that both parties cannot renegotiate and agree to changes.

This is what Janki wrote in an article in the Stabroek News, “Sanctity of contract’ stops ONE party from changing the terms of a contract by itself. If you agree to do something you must do it. You cannot change your mind and tell the other person that you will not do what you promised. ‘Sanctity of contract’ means that the Government cannot change the Petroleum Agreement by itself to give Guyana a better deal, and then tell Esso, Hess and CNOOC that they have to accept the new terms. That kind of bad behaviour is a classic ‘breach of contract.’ It is not a renegotiation.”

“People can make agreements and change agreements provided everybody who signed the agreement says okay. This is freedom of contract. It is a fundamental legal principle…The Petroleum Agreement can be changed right now if the Government, Esso, Hess and CNOOC all agree to change it. ‘Sanctity of contract’ does not stop them from changing (‘renegotiating’) the Petroleum Agreement.”’

Jagdeo needs to explain to the Guyanese people why it is that his government has backpedalled from its promise to renegotiate the contract. He must let the people know what pressures, if any, were brought upon his government, and if so who brought these pressures on the government. He must explain why on such a fundamental issue as seeking better terms, his government is in retreat mode.

Jagdeo has no legal limb to stand on in his respect to his reluctance to renegotiate. He has an obligation to at least raise the issue of renegotiation. If Exxon and its partners disagree then there are provisions in the contract to address such disputes. There is also leverage held by the government to force renegotiation.

Instead of addressing these issues, Jagdeo has resorted to foul-mouthed invectives against the publisher of this newspaper. This is not only unbecoming of the high office which he holds but shows his inability to defend the untenable position which he has adopted and which bodes no good for Guyana.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions and beliefs of this newspaper and its affiliates.)

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• APNU+AFC, ExxonMobil, Jagdeo, Peeping Tom, Vice President

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