By Kiana Wilburg
About two years ago, Natural Resources Minister Raphael Trotman pledged that all contracts in the extractive sector would be made public. But as it turns out, many companies in the industry are not open to cooperating with the government on this front.
This was noted yesterday by Minister Trotman during a press conference that was held at the Alliance For Change (AFC)’s Kitty Headquarters.
There, the AFC Leader was asked by Kaieteur News to respond to criticisms that the government is taking a piecemeal approach when it comes to the release of contracts.
The Attorney-at-law categorically stated that this is not the case.
“We did publish the oil and gas contracts, but what you should know is that each and every contract has a confidentiality clause in it. Therefore, a government on its own cannot go and publish the said contracts. So for all the oil companies, we wrote them about the intention of government to publish and they had to refer to their principals and then the contracts were published.”
The AFC Leader continued, “We have written to other concessionaires for the mining and forestry sectors and some expressed objections to the publications. Some of them said they need further clarifications. Therefore, if we just go ahead and put them out there then we would be opening ourselves to a lawsuit. It is not that we are doing it in a piecemeal manner. We have made efforts …”
Trotman added, “When we took over, we found that some contracts were negotiated by the Guyana Office for Investment (GO-Invest) and some by the Ministry of Finance. So there is no one repository of all of them. Some of them have gone missing…So it is not as easy as with oil and gas, because all of those were with the Guyana Geology and Mines Commission (GGMC) …”
The Minister of Natural Resources further noted that the companies have not given legal clearance on this issue as they are worried about their competitors having access to their information. He added as well that the government is not in a position to compel the companies to engage on contract disclosure in the absence of legislation.
Revenue Watch, a non-profit policy institute that promotes the responsible management of oil, gas and mineral resources for the public good, has also called for there to be the practice of contract disclosure in Guyana and other emerging oil producers.
The grant-making organization has noted that Governments must be held accountable for all contracts they enter, be they for the provision of roads or the purchase of goods. And when the contracts concern non-renewable resources, Revenue Watch said that the need for scrutiny is even more pressing. In this light, it said that the growing interest in mining, oil and gas contracts on the part of concerned citizens around the world makes a great deal of sense.
Given the history of government corruption and mismanagement of extractives, along with the environmental degradation, community displacement, violent conflict, and human rights abuses, Revenue Watch said it is no wonder that the calls for better government management of and more corporate responsibility in the extractive industries have never been louder.
Revenue Watch argues that contract transparency is critical to addressing better resource management and bringing contract stability to an industry that is notorious for corruption.
It said, “Over the long term, governments will be able to negotiate better deals, as the information asymmetry between governments and companies closes. In the shorter term, contract transparency will help government agencies responsible for managing and enforcing contracts, of which there are many, work in tandem. With contracts publicly available, government officials will have a strong incentive to stop negotiating bad deals, due to corruption, incompetence, or otherwise.”
Revenue Watch continued, “Citizens will better understand the complex nature of extractive agreements if they are out in the open and explained by the contract parties. States and companies may not be hiding anything of great import, but so long as contract disclosure is scattered and leaked materials suggest hidden horrors, that perception will persist—providing easy fodder for demagogues and politicians to make calls for expropriation and renegotiation in cases where it is not merited.”
The organization added, “Furthermore, contract transparency will result in more stable and durable contracts, both because they are less subject to the population’s suspicions and because the incentives for governments and companies to negotiate better contracts will be increased.”
In short, the organization said that contract transparency is a necessary element of any effort to promote the responsible management of natural resources for growth and economic development.
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