… Workshops to be held on rules and best practices
The World Bank is expected to provide Guyana with two experts who will provide guidance on the fiscal arrangements, rules and best practices that should govern the use of the Sovereign Wealth Fund (SWF).
This was revealed yesterday at a post Cabinet press briefing that was held by Minister of State, Joseph Harmon, at the Ministry of Presidency.
There, the Minister told media operatives that Finance Minister, Winston Jordan reminded Cabinet that Guyana had applied to the World Bank for a US$20M loan to assist in capacity building for oil and gas. He stated that as a consequence, the World Bank would provide two experts to conduct a high level workshop on the Sovereign Wealth Fund and the international best practices that are expected in its use.
The forum will be held on May 21, 2018. Harmon said that Government Ministers and even Opposition Members of Parliament would be invited to participate in the forum. He also informed the media that the World Bank has offered to provide assistance by way of workshops for the newly-established Department of Energy.
Minister Jordan had informed the nation that the US$20M loan from the World Bank would be used to build a tough legislative architecture for the nation’s oil sector.
The economist said that at the moment, there is no direct legislation for the oil sector, with the exception of those that already exist. He said that Guyana lacks the personnel who would be able to competently draft the pieces of legislation needed for the sector. With part of the World Bank loan, he said that the government would be able to do this.
For the time being, Guyana is making moves to draft several pieces of laws and policies which speak to Local Content, the establishment of a Sovereign Wealth Fund and the creation of the Petroleum Commission.
LOCAL CONTENT POLICY
The completion of the Local Content Policy is now up to Business Minister, Dominic Gaskin. This crucial document will provide guidance on the employment of locals as well as the use of goods and services provided by indigenous companies.
That said, Guyana’s draft Local Content Policy has been criticized in recent months for lacking provisions which would safeguard against exploitation by companies. The draft is still receiving “finishing touches” according to Natural Resources Minister, Raphael Trotman.
The draft however speaks nothing of how to avoid procurement fraud, conflict of interest and favouritism, among other crucial areas.
Instead, the Local Content Policy framework seeks to address, the suite of opportunities that may arise and the approaches to be taken in selecting and developing opportunities related to enhancing the capabilities of Guyanese nationals and businesses.
It also describes what will be done to ensure that the activities in the petroleum sector are conducted in a manner that transparently secures the maximum benefit for the people of Guyana, while recognizing the limitations of the country; and holding all actors accountable to the present and future generations of Guyanese who are the owners of the nation’s petroleum resources.
SOVEREIGN WEALTH FUND
The draft legislation which will pave the way for the establishment for the SWF is also receiving finishing touches.
Minister Jordan has announced however that the draft document will be the subject of several rounds of consultations before it gets to Parliament by year end.
In the interim, the International Monetary Fund has already provided advice to the government on the different areas in which they should improve on in the draft document. One of the areas it commented on in this regard, speaks to the need for clearer reporting requirements when the SWF is used by officials.
The Petroleum Commission is still stuck in a sub-committee of the National Assembly. It has been the subject of much consultation and criticized heavily for its many flaws.
One of the most disturbing concerns regarding the Bill pertains to the uncapped authority given to the Natural Resources Minister.
Not only will the Minister have the power to select the members of the Petroleum Commission, but he can also select and appoint the members of the Board, along with its secretary. In fact, the Minister can even disrupt the work of the Commission as he pleases.
Minister Trotman has already indicated that he intends to have such powers in the Bill diluted.
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