Four years later Guyana yet to publicly disclose beneficial owners of mining licenses

Jan 08, 2024 News

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…Gov’t/ now invites proposals for consultancy services to implement ‘roadmap’

Kaieteur News – The Extractive Industries and Transparency Initiative (EITI), a global standard to promote transparency and accountability in the oil, gas and mining sectors require all implementing countries, including Guyana to implement a register of the beneficial owners of the corporate entity (ies) that apply for or hold a participating interest in an exploration or production of oil, gas or mining licence or contract.

Guyana became a member of that body in 2017.

According to the 2019 EITI Standards, countries are required to maintain a public register of beneficial owners that demonstrates the level of ownership and details about how ownership or control is exercised. The 2019 EITI Standard requires that, as of January 1, 2020, implementing countries request, and companies publicly disclose, beneficial ownership information.

Four years after the timeline set out by EITI, Guyana has not yet developed a register of beneficial owners that hold lucrative mining licenses in the extractive sectors.

In the recently published GYEITI Report for the year 2021, it was explained that since 2018 Guyana approved a roadmap to implement beneficial ownership. The report explains, “Owning more than a certain percentage of shares certainly gives a meaningful indication of beneficial ownership (BO). However, in identifying the beneficial owner, the focus should also be on contractual and informal arrangements.”

EITI places great emphasis on beneficial ownership to monitor corruption in government.

The road map established under the previous administration is inclusive of two phases. Phase One includes capacity building on beneficial ownership and implementation requirements with key stakeholders, assessment of institutional framework to collect BO data, and work with stakeholders to define key terminologies, including the beneficial owner, politically exposed persons, and determination of thresholds for EITI reporting. Phase Two includes the collection of BO data and ensuring data quality, development of reporting templates, and public access to BO information. The Beneficial Ownership Roadmap is available on the GYEITI website.

The 2021 Report indicated that the COVID-19 Pandemic presented challenges that affected Guyana’s ability to implement the roadmap fully. It said, “GYEITI had several engagements with stakeholders, including the Deeds and Commercial Registry Authority and GRA, to identify opportunities to disclose BO information fully.”

The Report also indicated that Guyana has disclosed some BO information in its 2019 and 2020 EITI reports using the country’s BO definition.

Last October, the Multi-Stakeholder Group (MSG) approved the Terms of Reference (TOR) to recruit a consultant to implement the BO Roadmap approved in 2019. The Report said this year’s Workplan has laid out activities to support the full implementation of the roadmap, including BO disclosure on GYEITI official website.

On Sunday, the Ministry of Natural Resources invited Requests for Proposals for ‘Individual Consultancy Services for the Support for Guyana EITI in the Implementation of Beneficial Ownership Roadmap in Guyana.’

The deadline for submissions on the RFP is January 30, 2024.

Kaieteur News had reported that EITI decided to crack down on the absence of public registers because its position is that hidden identities in the extractive sectors only help to feed corruption and tax evasion. It said that people who live in resource-rich countries are at particular risk of losing out, when faced with systems that are not transparent, as extractive assets are too often misallocated for corrupt reasons.

This newspaper has been on the forefront of calls for the Government of Guyana to release the beneficial ownership information for the holders of this country’s oil blocks but there has been no progress in this regard.

This continues to spark concerns as the blocks were handed out prior to the hosting of General Elections in 2015.

Award of oil blocks

It is well known that the Canje Block for instance was awarded by the Donald Ramotar administration on March 4, 2015, days before that year’s General and Regional Elections, to a local company, Mid-Atlantic Oil and Gas.

Similarly, the Kaieteur Block was awarded on April 28, 2015, just two weeks before the elections, and like the Canje Block, it was done based on the advice of former Minister of Natural Resources, Robert Persaud. Two companies received the block with 50-50 stakes – Ratio Energy Limited (now Cataleya Energy Limited) and Ratio Guyana Limited.

The award of the oil blocks to the companies was especially concerning since the ultra-deep drilling is required for those blocks, a technique which only a handful of companies in the world have the technology, track record, and capability to execute. The red flags which have manifested in both situations include that the awards were given to unqualified companies, that the initial owners quickly flipped the blocks without doing any work, that they are incorporated in ‘secrecy’ jurisdictions, and that Guyana likely lost revenue due to the avoidance of an open, competitive bidding process.

 

 

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• beneficial, Block, disclose, EITI, oil, owners

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