– Chris Ram
Minister of Natural Resources, Raphael Trotman has effectively stripped the Commissioner General of the Guyana Revenue Authority (GRA) of his lawful duty to examine imports and to take action as he considers necessary.
This is what Attorney at Law Christopher Ram has noted based on his examination of the Production Sharing Agreement (PSA) that Trotman signed, on government’s behalf, with ExxonMobil.
Ram said that the importation provisions of the 2016 agreement are drastically different from those of the 1999 agreement that was signed by former President the late Janet Jagan.
According to Ram, all of the changes are in favour of ExxonMobil.
Ram said that “Article 21 dealing with Import duties has been drastically revised and is clearly a touchy issue, having prompted advertisements and statements by Esso Exploration and Production Guyana Limited, and the Government of Guyana defending the most generous provisions available anywhere in the world.”
The attorney said that in the 1999 Agreement, Esso, its affiliated companies and subcontractors engaged in petroleum operations were permitted to import, free of duty or other taxes or imposts, “machinery, equipment, vehicles, materials, supplies, consumable items (other than foodstuffs or alcoholic beverages or fuel), and movable property, where imports in any of the said categories have been certified by the Chief Inspector designated as such under section 3 of the Act to be for use solely in carrying out petroleum operations.”
Ram added that this has now been changed in the 2016 agreement, extending to “drillships, platforms, vessels, geophysical tools, communications equipment, explosives, radioactive sources, oilfield supplies and lubricants, as well as all items listed on Annex D” of the PSA.
Annex D lists nearly 250 classes of items which can be imported under the Agreement. Ram noted that not only has the list been widened, but the process is now “carte blanche. Whereas under the 1999 Agreement the items had to be certified by the Chief Inspector to be for use in the operation, under the 2016 Agreement no such certification is necessary as Trotman has now agreed that all those hundreds of items, as well as any other items, shall be deemed approved and certified by the Chief Inspector.”
“This is almost farcical since after 32 months, Trotman is yet to appoint a Chief Inspector as required by law. It means that the fictitious and unreal deeming is being done by a non-existent officer. What it also means is that Trotman has effectively stripped the Commissioner General of his statutory duty to examine imports and to take action as he considers necessary.”
For over 20 years, a Chief Inspector has not been in place. However, Trotman recently indicated that someone will soon be appointed to that position.
At a recent press conference, the Minister said that “the government is looking to appoint all of the people needed.”
Trotman said that in the interim, Commissioner of the Guyana Geology and Mines Commission (GGMC), Newell Dennison, will be carrying out the functions of the Chief Inspector.
“This has been the case for many years; it has always been so. The GGMC has been given the authority to represent me as Minister in all areas.”
The PSA makes several references to duties that are to be carried out by the “Chief Inspector.”
For instance, under Article 21 of the contract, the Chief Inspector has a duty to certify fuel imports by ExxonMobil for the purpose of carrying out petroleum operations. The Chief Inspector is expected to monitor the imports.
In previous writings of his weekly column “Every man, woman and child should be oil-minded,” Ram had pointed out the appointment of a chief inspector is the key requirement of the Petroleum Act which has been ignored for at least twenty years.
The Petroleum Act requires that the Minister designate a public officer or any employee of the Guyana Geology and Mines Commission as Chief Inspector, and such number of public officers or employees of that Commission, as may be considered necessary for the purposes of this Act, as Inspectors. Such appointments are required to be published in the Official Gazette.
Ram had pointed out “the last person who was so appointed was Mr. Brian Sucre who died several years ago.”
Ram said that the seriousness of the failure to appoint a Chief Inspector lies in the fact, that the Chief Inspector is the person with direct responsibility for the administration of the sector, to manage the oil companies.
Ram noted that the People’s Progressive Party/Civic administration did not appoint the Inspector and cannot use as an excuse that oil was not a big deal then.
“After all, thousands of hectares of potentially mineral rich resources offshore were given out to oil companies, which by law should be supervised by the Chief Inspector and inspectors appointed by the Minister.
“The exploration phase is admittedly light on expenditure, but it does give operators exclusive right to carry out prospecting activities in the blocks for which they receive a prospecting licence.”
He said that it is therefore careless in the extreme that even after the establishment of a natural resources ministry, the PPP/C made no such appointment.
“Of course, that gave the Minister extensive influence over the oil operators, which was probably the objective; then came the APNU+AFC Coalition which has also failed to act a full two years after a significant oil discovery with the likelihood of more to come!”
Ram said, “In fairness, it does appear that the Commissioner of the Geology and Mines Commission carries out these functions in the absence of the Chief Inspector. The problem is what if a court matter arises and a litigant challenges the right of the Commissioner to exercise any of the functions or power of the Chief Inspector.”
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