Jagdeo’s explanations are a case of “talk half, leff half”

Jun 03, 2024 Features / Columnists, Peeping Tom

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Kaieteur News – Vice President Bharrat Jagdeo has elevated the art of political sidetracking to a new level. His recent press conference, where he addressed the contentious Production Sharing Agreement (PSA) signed by the previous government, was a masterclass in political strategic omissions.

For those unfamiliar with the phrase, “talk half and leff half” is a quintessentially Guyanese way of describing someone who conveniently omits crucial details. Jagdeo, it seems, has embraced this approach with gusto. When Jagdeo was in Opposition he passionately denounced the PSA signed by the APNU+AFC. He described the agreement as a “sell-out.” He pledged to renegotiate the agreement once his party was in power.  It was a promise that resonated with many. Jagdeo’s pledge to renegotiate the agreement would have won his party many votes from those who were shocked and peeved at the agreement signed by the APNU+AFC.

However, when the PPPC got into office, it began to retreat from the obligation to renegotiate the PSA signed between the Government of Guyana and ExxonMobil, CNOOC and Hess. At his most recent press conference last Thursday, Jagdeo was asked whether if certain measures such as ring fencing was in place whether his government would have been in a better position to meet the demands of teachers. He said that when in Opposition his party had been highly critical of the agreement, including its tax measures and lack of ring fencing. But then, he deftly sidestepped the elephant in the room: the promise to renegotiate the contract.

He has offered over the past four years a buffet of excuses for not renegotiating the agreement. Each excuse conveniently ignores the crux of the issue. First, he invoked the sanctity of contracts, a favourite refuge for politicians who find themselves unable to deliver on grand promises.  This column has explained before that this principle protects against unilateral changes to an agreement which is different from renegotiation.

Then, he expressed concern about sending negative signals to investors, as if renegotiation would somehow transform Guyana into an investment pariah. If anything, the failure to renegotiate places greater pressure on the government to grant terms to other investors similar terms to that offered to ExxonMobil, Hess and CNOOC. The third excuse is the claim that renegotiation would break the momentum of development within the oil and gas sector. This excuse rings hollow. Other countries, including Trinidad and Tobago, have successfully renegotiated contracts to secure better terms for their citizens without causing a mass exodus of investors or without renegotiation acting as a disincentive to attracting new investment.

 The terms of the PSA are unconscionable. Unconscionable terms in a contract refer to provisions that are so extremely unjust, one-sided, or oppressive that they shock the conscience of the court. When the terms of an agreement are unconscionable, there exists both a legal right and a moral duty to renegotiate its terms.  Legally, contracts that are grossly unfair and exploitative can be challenged under the doctrine of unconscionability, which aims to prevent one party from being unduly advantaged over another. The doctrine is rooted in the principle that contracts should be fair and equitable, ensuring that no party is subjected to undue hardship or exploitation. Fairness and equity are foundational to contract law. Yet despite the acknowledged imbalance in the contract, Jagdeo refuses to renegotiate.  But to understand the magnitude of Jagdeo’s half-talk, it’s essential to delve into the specifics of the PSA. The agreement, signed under the previous administration, has been criticized for its generous tax concessions, poor royalty payments and lack of ring fencing—a measure that would prevent costs from one project being used to offset profits from another. These provisions have significant implications for Guyana’s revenue from its oil wealth.

Jagdeo’s government has indeed drafted a new PSA, aimed at future agreements. However, this is a classic case of too little, too late. The Stabroek Block, where over 40 discoveries have already been made, remains under the old agreement’s terms. This block is currently the epicenter of production. The failure to apply the new provisions to the Stabroek Block represents a glaring and grave omission. Jagdeo’s half-talk on the PSA is a disservice to the people of Guyana. It obscures the reality of a missed opportunity to secure better terms for the country’s oil wealth.

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

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• Bharrat Jagdeo, Peeping Tom, Production Sharing Agreement, talk half and leff half

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