Every Man, Woman and Child in Guyana Must Become Oil-Minded

Part 11

 

Today we conclude our review of the Petroleum Commission Bill which was begun last week in Part 10. Readers will recall the critical review and adverse comments on the composition and appointment of the Chairman and the eight members of the Board of the Commission who will serve for mere one-year periods after which they may or may not be reappointed. It is instructive to note that under the Ghana Petroleum Commission Act on which the Guyana Bill has been patterned, directors are appointed for three years!

The financial provisions in relation to the Commission are set out in clauses 4 (4) (b), 8 (7) and 34 of the Bill. It is not all too obvious that these provisions are entirely consistent with Article 216 of the Constitution which, broadly, requires all moneys due to the State to be paid into the Consolidated Fund. Hopefully, any inconsistencies will be addressed by the Select Committee when they review the Bill and hold hearings.

It is unclear whether the drafters’ instructions included a review of the Petroleum Exploration and Production Act which would have helped in providing direction and preventing overlaps and confusion. The Minister had announced earlier that the Petroleum Exploration and Production Act was not being amended at this stage. I strongly believe that the Petroleum Exploration and Production Act Cap. 65:04 should be amended concurrently with the introduction of the Commission.

The law does not require or authorise the proposed Commission to prescribe standards of best practices considered necessary for the safe and efficient extraction of petroleum resources. What may be helpful at this stage is for the Bill to be reviewed by someone who understands the petroleum industry and who would be able to identify the lacunae in this Bill.

 

Penalties

The penalties under the Bill are quite severe. As is customary, various clauses in the Bill create obligations and offences for which penalties are specified. Clause 51 does a mopping up exercise by providing that where no penalty attaches to an offence committed under the Bill, the penalty is $10 million and imprisonment for three years. Additionally, clause 49 which empowers the Minister to make regulations for the proper administration of the act also empowers him to provide penalties of a fine of up to $5 million and imprisonment for three years.

 

Repeal

The clause in the Act dealing with repeal is rather interesting. It seeks to repeal any provision in the Guyana Geology and Mines Commission Act, the Mining Act and “any other legislation that are in any manner inconsistent with the provisions of this Act” are repealed. It is bad enough that the Bill is described as an Act but how in the name of legal drafting is any person to know which other legislation to refer to in order to ascertain the matters so repealed. This is legal laziness at its worst.

 

Conclusion

This Government has to find new ways to consult and to make them meaningful. I attended a consultation on an earlier draft months ago and was impressed at the constructive comments and suggestions made thereon. To bring back an almost identical Bill and invite comments thereon is disrespectful not only of those who showed interest but of all Guyanese. Everything about the oil and gas sector appears to be shrouded in secrecy and it is not even possible for the public to understand the source of the model for this Bill.

Someone wrote me earlier today saying that the Bill, in their “humble opinion, is a disgrace. It’s a rip-off of its Ghanaian equivalent with the slender checks and balances from that document removed.” The writer attributed this in part to the absence in the Constitution of provisions dealing with the country’s natural resources and expressed some fear that the Natural Resources Parliamentary Committee does not have the resources or the focus for them to give sufficient attention to monitoring oil.

This Bill will play a major role in the future development of this country. Let us take it seriously.

 

Comments  

Every Man, Woman and Child in Guyana Must Become Oil-Minded Part 36

Introduction Readers will recall that Article 27 – Applicable Law, was addressed in Column 29 which is available on the website of the Stabroek News as well as on chrisram.net.

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Every Man, Woman and Child in Guyana Must Become Oil-Minded Part 35

Government inaction now constitutes force majeure! Today we take up from Article 24 which deals with force majeure, the definition of which is set out in paragraph 2.6.

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Every Man, Woman and Child in Guyana Must Become Oil-Minded Part 34

Just a reminder that this series within a series seeks to compare the Janet Jagan administration’s 1999 Agreement with the Trotman 2016 Agreement and as we closed last week’s column we were on Article 20.

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Every Man, Woman and Child in Guyana Must Become Oil-Minded

Part 33   Local Content Article 18 which deals with local content has been subject to a number of modifications, the first of which recognises that the activities will be carried out not by the Contractor but by an Operator appointed by the three companies making up the Contractor.

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Every Man, Woman and Child in Guyana Must Become Oil-Minded Part 32

The March of Folly   The 2016 Agreement places greater emphasis on “gas”, or more correctly, “associated gas”, compared with the 1999 Agreement, including superficially minor, but no less significant, changes to Article 11 – Cost Recovery and Production Sharing and Article 12 – Associated and Non – Associated Gas.

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