David Hinds sees political reasons behind creation of Dep’t of Energy

Dr David Hinds

Government’s planned establishment of a Department of Energy has to do with political manoeuvring and direct oversight by the President than with any indictment of the performance of Minister of Natural Resources Raphael Trotman, Working People’s Alliance executive Dr David Hinds says.

The Arizona State University Professor posits that the decision was taken so that the A Partnership for National Unity (APNU) faction of the governing APNU+AFC coalition could assert itself in one of the most influential sectors of the country.

“I read it as a political move aimed at decreasing the influence of the AFC in government operations. If this is true, it is a fair decision—the AFC already has control of key Ministries such as Infrastructure, Public Security and Agriculture.  The ultimate outcome is that the AFC would not be able to take direct credit for the benefits,” Hinds, a political scientist, told Stabroek News following the announcement.

Further, he added, “The other consideration, I think, has to do with the fact that this is the most powerful government department—its performance will determine the country’s socio-economic future. Given the controversy swirling around the contract and other related matters, I believe the President is sending the signal that he wants to be directly responsible for the management of the sector—he is saying the buck stops with him.”

Following last week Tuesday’s Cabinet meeting, Trotman announced that a Department of Energy, focused only on the development of the petroleum sector, would be established within the Ministry of the Presidency within the next six months.

According to a Ministry of the Presidency statement, Trotman said he proposed the department to the president last year.

“Eventually the expectation is that the Ministry of Natural Resources will hand over responsibility of the function of petroleum to this new Department and we will see a more direct and focused mandate from this Department of Energy and we will, of course, as a Cabinet, be supporting the Department,” he was quoted as saying.

Cabinet has mandated that Trotman head a Task Force, which would comprise the Finance, State, Public Infrastructure and Business ministers, to formulate a proposal for the development of the mandate of the Department of Energy, as well as how it will be structured and staffed. The Public Security, Public Telecommunications, Education and Social Protection ministers are also expected to be included.

The Natural Resources Minister explained that  he conceived the plan for the formation of the department, sometime  last year, it was long before criticisms over the ExxonMobil contract and based solely on his assessment that petroleum needed its own ministry .

“That petroleum is taking up 80% of our functioning,” he said, while noting that the Natural Resources Ministry has other responsibilities, including the gold, bauxite and forestry sectors.

“It really needs to stand on its own. We are heading towards production in a matter of months. The normal turnaround time [globally] is about 10 years… but this is just record time. So, it is that and we also we continue to have multiple discoveries,” he said.

“My intention is I want the president to determine the future. In other words, the vision has to come from him. Like other ministers, we will all have a different part to play but as head of the task force I will work with the other ministers and we will design what we think is an appropriate model… For example, in Trinidad there is a department of energy… The other thing is, inasmuch as I enjoy being minister with responsibility, oil is going to be what sugar was two, three hundred years ago. It will literally become the driver and pivot of the economy of Guyana. It will affect both positive and could, in a negative way, our culture our society. It is going to change Guyana in every sphere of our lives and I believe, as I did the critical analysis last year that it really needs to be closer to the president. The president should be able to shape the vision… I don’t think that is an unreasonable stance,” he added.

Hinds believes that the Energy Department’s establishment which would see it dealing specifically with the petroleum sector was a very sound decision since if this sector is lumped together with others, it increases the possibility for confusion and lack of transparency.

Order

“The move towards a stand-alone department, therefore, potentially brings some much-needed order to this important sector. It also makes oversight easier and this will be a critical component as the sector develops,” he said.

He thinks the views expressed by some, including Leader of the Opposition Bharrat Jagdeo,  that the President was not pleased with Trotman’s performance and has taken away the sector for him is not formed from  political and economic analysis .

“My conclusion is that this is less of a statement on Trotman’s performance to date and more political manoeuvring,” he stressed.

Trotman too has dismissed claims that he has been stripped of his duties saying that if one looked at the timeline of events they would see that he had proposed the department since last year, long before the ExxonMobil bonus and PSA criticisms began.

“It was not inspired by criticisms because the president had it with him for several months. But certainly, I believe, it turned out to be in our best interests because I will not be the target for an otherwise good industry that is coming and I believe it will remove the distractions,” he had said last week even as he  emphasized the need for the president’s guidance in directing the way forward.

For Hinds, a full Ministry of Energy is preferred given the enormity of the petroleum operations here.

However, he said that a ministry would mean having a minister in charge, which would in turn mean that the president would not have direct control.

Going forward he is lobbying for a special Parliamentary Sectoral Committee on Petroleum to be formed and it should be actively overseeing the new energy department.

“This would strengthen the profile of that branch of government while providing vital checks on the sector,” he posits.

Underscoring that the nation now has to renew its focus and plan for what is ahead and not be lost in criticising the PSA with ExxonMobil and affiliates, Hinds said that he “would not beat up the government for the quality of the contract” but blame them for not employing a national approach.

“You get the contract that your approach deserves. Governments tend to negotiate largely with the party in mind. A national team is more likely to negotiate with the nation in mind. I have always held the position that countries like Guyana which do not have the necessary leverage would more often than not end up with the kind of contracts we got. So unlike others I am not surprised at the contract. In my view we got less than others in similar situations largely because we lack national consensus. If Exxon were negotiating with a team that included our best talents from the government, the opposition and civil society, it would have been pressured to concede more,” he said.

“So going forward, I would urge a more broad-based approach rather than a narrow government-centred one. The government must lead, but on such an important matter it must be very inclusive. If ever social cohesion is needed, it is on this matter,” he added.

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