The oil companies are also no paragons of transparency

Feb 24, 2023 Features / Columnists, Peeping Tom

---

Kaieteur News – Too much fuss is being made over the suspension of Guyana from the Extractive Industries Transparency Initiative (EITI). Guyana’s recent suspension should be used to permanently exit from the arrangement.

Guyana has no need for EITI. The reports which form part of the country’s reporting obligations are hardly ever studied or brought to the attention of the principal stakeholder in this process – the public. And the costs of establishing an EITI Secretariat and of paying the super-salaried head of such a Secretariat is not worth the intangible benefits which can be derived from subscribing to the Initiative.

Few Guyanese today, can indicate how much and on what oil and gold mining revenues are being spent. Many may not be aware of the total withdrawals made from the Natural Resource Fund.

How many persons know about the weekly gold declarations made? Each day, the radio and newspapers give you the international price of gold and what is being offered by the Guyana Gold Board. But you have to wait until either the government’s half yearly report or its annual budget speech to get precise information as to actual gold declarations. And there is no information provided about daily oil production.

When it comes therefore to making information available to the public, the EITI process has not been successful. And this was supposed to be one of the main objectives of the EITI – it was supposed to ensure greater transparency in the flow of information about the extractive sectors.

Instead of the public being enlightened, the goalpost has been shifted. The focus is now on government rather than the oil companies. One of the original aims of the EITI was to ensure greater transparency on the part of oil and mining companies. There was tremendous concern at the turn of the century over the truthfulness of the disclosures made by companies in the mining sector. The EITI was intended to ensure that these companies are encouraged to provide more information about their operations. But instead of forcing these companies to make public more information, the burden is being shifted towards reporting standards on the part of governments. How come Guyana is being suspended for non-compliance and there is no process to test whether the oil companies are complying with their reporting obligations?

Today, one can hardly boast about transparency in the extractive sectors. Kaieteur News has been trying for a long time now to obtain copies of certain mining agreements. Those agreements have been promised but not delivered.

The oil companies are also no paragons of transparency. The country is not provided with the opportunity for near real time auditing of its expenses and production. The Production Sharing Agreement signed requires notice to be given to the oil companies before any inspection of their books takes place. And the oil companies do not publish for the benefit of the public weekly or monthly production figures or expenses.

The verdict is mixed about whether EITI has been successful. On the one hand it is generally claimed that the process helps to spread the norm of transparency. But there is also the finding that there is no evidence that EITI has improved natural resources governance. It was also found that there is limited space for public engagement in the process, outside of the multi-stakeholder representation. And in terms of its methodology, there is little to point to suggest that the process can effectively measure its impact on national development. The initiative is voluntary and there are no sanctions to force  countries or companies to be more transparent.

It is high time that Guyana exits this EITI. Not only does Guyana have to compile reports but the county is also saddled with the responsibility of having an independent firm review the data available. This is an additional financial cost. All the sums which are being used for the EITI process can be saved and put towards a scholarship fund for university students.

There are better ways to promote transparency in the mining sector. For one, the Mining Act and the Petroleum Act can be amended to insist on timely public disclosures about which companies and individuals have been assigned mining rights, the production in mines and oil fields, the taxes earned and paid, the number of local employees involved in each entity, the names of the principals of companies involved in the mining sector and the uses to which mining revenues have been put. The laws of Guyana can be amended to allow to make it mandatory for governments to publish such information. There is no need for any EITO or for that matter for requests for such information to be obtained via the Freedom of Information Act. These provisions should be legislated locally and backed by the appropriate sanctions.

(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.)

---

• Extractive Industries Transparency Initiative (EITI)., Guyana, Natural Resource Fund, Peeping Tom, Transparency

---