By Kiana Wilburg
Despite their flashy promises, oil companies in Trinidad and Tobago have not been fully committed to developing local industries. Not only have they ignored the requirement for the participation of nationals, but they used several mechanisms to avoid the payment of billions of dollars in taxes. This was the bleak picture Trinidad and Tobago’s Energy Minister; Franklin Khan painted to his countrymen and women at a fo
rum titled “Spotlight in Energy.”
That was said in March 2018. But since then, things have only gone downhill, says Trinidadian Local Content Expert, Anthony Paul. During an interview on Kaieteur Radio’s Programme called, “Guyana’s Oil and You” Paul said that Trinidad’s Energy story is one that holds several lessons for Guyana.
According to Paul, Trinidad has become a captive state; a place where the oil companies do as they please and get away with in the absence of consequences for those who do not institute the law.
Paul said, “To tell you the truth, I am saddened by the state of Trinidad. In fact, the Spotlight on Energy conference was called to bring tax avoidance by oil companies under the microscope. The Prime Minister and Ministers of Energy and Finance found that the companies were not paying their fair share of taxes and they were finding mechanisms to avoid it.”
The Energy Advisor added that the government even brought in international consultants to prove its case of tax avoidance by the companies.
But the most important point for Paul is why Trinidad even found itself in that position to begin with. In this regard, the Chatham House Advisor highlighted that there is legislation as well as a mechanism in place to prevent tax avoidance by oil companies. He noted that there is a special committee that is meant to oversee that tax collection, but it has not functioned for over 15 years.
Even on the issue of local content, which speaks to the use of indigenous goods, skills and services, Paul pointed out that there is a failure to implement robust policies and regulations.
Paul said, “The Minister (Franklin Khan) talks about local content (requirements not being adhered to by oil companies). But the truth is that we have strong local content regulations in place and if they were followed, we would have prevented that from happening. But the Ministries of Finance and Energy have not been implementing the legislation.”
He added, “So even though you want to put policy and legislation in place, if the regulator isn’t accountable, and there is no consequence for inaction, then you are wasting time and the companies know that. I describe Trinidad as a captive state, the companies can do what they want and get away with it, because that was last year March. Things have only gone downhill since then.”
Considering the foregoing, Paul stressed that it is in Guyana’s interest to really examine the TT energy story from all angles, specifically as it relates to was done right, what did not work and why.
Providing more words of wisdom for Guyana, which is on the cusp of becoming a petro-state, Paul said it is essential for mechanisms to be put in place to ensure the process of decision making is transparent. He stressed that those making decisions must be held accountable while reiterating that there must be consequences for noncompliance with best practices.
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