The road to disaster

Aug 16, 2024 Features / Columnists, Peeping Tom

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Kaieteur News – One can only marvel at the audacity with which the PPPC government has managed to sidestep the establishment of a Petroleum Commission, a move that could only be described as a grotesque display of governance by whimsy. It is a curious spectacle, this deliberate procrastination on a matter so crucial to the regulation of Guyana’s burgeoning oil and gas sector.

The excuse offered that such a commission would somehow slow down decision-making, is an insult to the intelligence of anyone who has bothered to read beyond the headlines. The purpose of a Petroleum Commission is not to encumber, but to ensure that the sector operates under a framework of transparency, efficiency, and environmental responsibility. Yet, in the PPPC’s view, it appears that the rigors of oversight are merely inconvenient hurdles to be sidestepped in favor of more expeditious, albeit reckless, governance.

The consequences of this obstinate refusal to establish a regulatory body are as predictable as they are disastrous. The absence of a Petroleum Commission ensures that the governance of the oil and gas sector remains shrouded in opacity, with decisions concentrated in the hands of a few, or worse, in the grip of one. This is not governance; it is a freak show of control, where the stakes are too high and the players too inexperienced to be left unsupervised.

The saga of the PPPC government’s refusal to establish a Petroleum Commission is a tragicomedy of errors, a farcical display of governance where prudence and accountability are sacrificed on the altar of political expedience. In any well-ordered society, the discovery of vast natural resources—such as the billions of barrels of oil off Guyana’s coast—would be met with a corresponding framework of robust regulatory oversight. This oversight is not merely a matter of good governance; it is an essential safeguard to ensure that the nation’s resources are managed in a manner that benefits all, rather than a select few. Yet in Guyana, the PPPC government has chosen to eschew such safeguards, instead opting for a regime where decision-making is concentrated in the hands of the few, where oversight is seen as a hindrance rather than a necessity, and where the very idea of a Petroleum Commission has been relegated to the status of an inconvenient afterthought.

It is worth recalling the origins of the Petroleum Commission and why its establishment is not only a matter of legislative formality but one of urgent national importance. The APNU+AFC government, in a rare moment of foresight, recognised the need for institutional and regulatory development in the oil and gas sector. They sought and secured a US$20 million facility from the World Bank to support this endeavor. Among the funded project-components was the development of a draft Petroleum Commission Act, a piece of legislation designed to ensure that the exploration, development, and production of petroleum in Guyana would be conducted efficiently, safely, and in an environmentally responsible manner. This was not merely a bureaucratic exercise; it was a foundational step towards ensuring that the wealth generated from Guyana’s oil reserves would be managed in a way that benefits the entire nation.

The APNU+AFC government developed and tabled a Petroleum Bill, a comprehensive piece of legislation that outlined the functions and responsibilities of the Petroleum Commission. It was designed to be a key regulatory body, tasked with overseeing every aspect of petroleum operations in Guyana. The Commission was to promote government policies, review and recommend plans and proposals to the Minister, manage bid rounds for licensing, and ensure compliance with national laws, health, safety, and environmental standards. It was also to play a crucial role in monitoring petroleum operations, including reserve estimation and production measurements, promoting local content and participation, and maintaining a national petroleum databank. In short, the Commission was envisioned to be the backbone of Guyana’s oil and gas sector, ensuring that it operated in a manner that was both transparent and accountable.

Yet, despite the clear and pressing need for such an institution, the PPPC government has allowed the Petroleum Bill to languish in the National Assembly, gathering dust while the sector it was meant to regulate continues to expand at breakneck speed. When the PPPC assumed office, they signaled that they would move swiftly on two key pieces of legislation: the Natural Resource Fund Act and the Petroleum Commission. They have instituted the former, albeit not without controversy, but have prevaricated on the latter. And now, in a move that can only be described as comical, they offer the explanation that the implementation of the Petroleum Commission would slow down decision-making in the oil and gas sector. This argument is not only disingenuous; it is dangerously misleading.

The claim that a Petroleum Commission would impede decision-making is a gross misrepresentation of its purpose and function. A Petroleum Commission, as envisioned in the APNU+AFC’s draft legislation, is not a roadblock but a facilitator. It is there to ensure that decisions are made based on sound analysis, that they are in line with national policies, and that they are executed in a manner that protects the interests of the Guyanese people. The Commission’s role is to provide oversight, to monitor compliance, and to hold operators accountable. It is to be the eyes and ears of the nation in the oil and gas sector, ensuring that every barrel of oil extracted from Guyana’s shores is accounted for, and that the revenues generated are used for the benefit of all Guyanese.

The PPPC’s refusal to establish the Petroleum Commission can only be interpreted as a deliberate attempt to avoid this kind of scrutiny. By keeping the sector unregulated and free from oversight, they have created a situation where decisions can be made behind closed doors, with little to no transparency. This is not the kind of governance that the people of Guyana deserve, nor is it the kind of governance that will ensure the sustainable development of the nation’s resources. The concentration of power in the hands of a few, or worse, in the hands of one, is a recipe for disaster. It creates an environment where corruption can flourish, where the interests of the nation can be sacrificed for the benefit of a select few, and where the long-term stability of the sector is put at risk.

The consequences of this approach are all too predictable. Without a Petroleum Commission to provide oversight, there is little to prevent the mismanagement of the sector. The lack of regulatory oversight means that operators are free to act with impunity, cutting corners on safety and environmental standards, and engaging in practices that may be detrimental to the long-term sustainability of the sector. This is not a scenario that any responsible government should allow to unfold, yet it is precisely the scenario that the PPPC seems determined to create.

In light of these concerns, it is imperative that the international community takes a stand. Donor countries and agencies that are committed to supporting the responsible development of Guyana’s oil wealth must withhold all funding for the sector until the Petroleum Commission is established. The message to the PPPC should be clear: the world will not bankroll a descent into chaos. If the PPPC is serious about governing in the interests of all Guyanese, they must move swiftly to establish the Petroleum Commission and ensure that the sector is subject to the kind of rigorous oversight that it requires. Failure to do so will not only put the future of the oil and gas sector at risk; it will also undermine the credibility of the government..

(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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• establishment, framework, governance, operates, PPPC

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