The report of the investigation needs to be made public

Oct 07, 2023 Features / Columnists, Peeping Tom

Kaieteur News – The government continues to insist that it is the Guyana Revenue Authority (GRA) which is the final arbiter in relation to the audits of oil expenses being claimed by the oil companies. But this is not the legal position. The Production Sharing Agreement (PSA) vests the power to conduct audits in the Minister.

The Minister in this instance means the Minister assigned responsibility for Petroleum and if there is no such assignment, then the President.

Article 23.2 of the PSA states that: “The Minister shall have the right to audit the accounting records of the Contractor in respect of Petroleum operations in accordance with the accounting procedure.”

The Accounting Procedure, annexed to the Production Sharing Agreement (PSA), requires that the Minister (NOT the GRA) shall have the right to audit, the expenses, accounts and records of the oil companies within 2 years of the end of each calendar year.

As far as is known the audit which was conducted was for the period ending 2019. Therefore whatever is the outcome of that audit, is purely of academic importance since the two year period has elapsed and thus no claims can be made on the contractor, despite whatever otherwise the Vice President may believe. The period for recovering any US$214M is long gone and the contractors are under no legal obligation to entertain any such claim.

The Accounting Procedure under the PSA provides that at the conclusion of the audit, a written report has to be issued to the oil companies. The written report has to contain all claims arising from the audit. The oil companies have 60 days to respond. The Accounting Procedure provides that should the Minister consider that either the report of the reply requires further investigation such investigations shall be undertaken within 60 days of either receipt of the report of reply.

The Accounting Procedures hold the Minister responsible for matter relating to the audit and to the filing of claims and or further investigations. As such, it is not the legal position that the GRA, the auditor, which is responsible for the audit, or filing the report to the contractor and responding to the contractor’s response.

If along the way the Minister was misadvised, then he has only himself to blame. It is he and he along who has to submit the report with the claims to the oil companies, and it is therefore he who has to be satisfied the expenses being claimed represent the totality of the sums which are not recoverable. The buck simply cannot be passed.

The government is now however saying that an investigation has been done and there was some authorized contact between the oil companies and personnel from its Petroleum Division. In its statement, the government says it wish to bring clarity to the issue.

But it has not brought this clarity. What was the purpose of the investigation? Was this an independent investigation? Who undertook the investigation? Was due process accorded to those who may have been implicated in the present imbroglio? What were the findings of the investigation?

Unless answers are provided to these questions, then the public is left guessing. What the public needs to know is when was the audit complete, and when was the required report submitted for the attention of the Minister? How long after did the Minister send the report, with his claims, to the oil companies? How soon after was a response received? And did this response, if at all, occasion the need for further investigations?

Guyanese must be careful also about the conclusions which they draw from this matter. The fact that an audit may have flagged expenses of US$214M does not necessarily mean that those expenses were wrongfully claimed by the oil companies. They were simply flagged and it is for the parties to undergo a process in respect on how this disputed sum is to be resolved.

People should also avoid rushing to judgment against the staffer until and unless the government makes public the details of the investigation done into the matter and until such time as the said investigation is deemed to be independent and assures any accused person of the right to a hearing.

(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.)

contractor, Guyana Revenue Authority (GRA), Peeping Tom, Production Sharing Agreement, relation

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