Independent third party must check oil revenues

Chairman of the Trinidad and Tobago Transparency Institute, Dion Abdool addressing the gathering.

The chairman of Trinidad’s transparency group says that it  is imperative that an independent third party check revenues from the company extracting oil and the subsequent flows to the government.

Imploring that Guyana learns from the mistakes made by the Twin-Island Republic, Head of the Trinidad and Tobago Transparency Institute (TTTI)   Dion Abdool said “You are on the cusp of great tangible wealth. It is for you and other civil society members, by your vigilance and advocacy, to ensure that wealth which is yours benefits society communities, your children …it is a serious responsibility,” he added.

Speaking at a fund-raising dinner for the Transparency Institute Guyana Inc (TIGI), on Saturday at the Pegasus Hotel, Abdool, while he made no mention of any specific contract that the government here has concluded, warned that failure to be vigilant could result in tax and other losses through schemes perpetrated by the very companies.

Abdool called on the local transparency body and other civil society groups to be proactive in their push for the reporting of revenues.

“Like TTTI, the Guyana Transparency Institute sits at the EITI (Extractive Industries Transparency Initiative) table, they must insist for transparency and accountability in the reporting of the revenue so that there can be no tax leakage. Learn from our lessons well in Trinidad; it will redound to your benefit,” he said.

“I suggest that, as in Trinidad and Tobago, this is an area for Guyana and you all in this room and other civil society members to pay attention to and more so now that you are on the cusp of such great wealth…this is of paramount importance and there must be an independent third party looking at the revenue coming from the corporation that is extracting the oil and from the entity- the government- that is receiving it. Somebody must do some reconciling there as a start,” he added.

He pointed to reporting from Guyana that ExxonMobil has said that there will be an independent third party reportage system for the company and government of revenues and oil.

“Our intention is that we are disclosing them to an independent third party that is identified by the government and the government also discloses to that same independent third party the revenues that they are receiving and then the third party is

supposed to reconcile in and out and make that public on annual basis,” Exxon’s Public Affairs Officer Kimberly Brasington had said when asked two weeks ago by Stabroek News about systems to ensure transparency.

She had also verbally assured that the company would in no way try inflate costs because it has laws and standards in its own country to adhere to.

When Minister of Natural Resources, Raphael Trotman was asked by Stabroek News about the third party verification, he said “Quite separate from Exxon’s commitment, the Government has a responsibility and obligation to declare all earnings from petroleum production and intends to do so under the mechanism of the sovereign wealth fund legislation which will require reports to the National Assembly, and through the EITI reporting process”.

He said that he was awaiting the Guyana Geology and Mines Commission’s input as that agency has responsibility for the accounting aspect of Exxon’s work programme.

Abdool believes that disclosure is in everyone’s best interest and that the absence of information leads to mistrust. “All may be well but the mere fact that the information is not available leads to mistrust in the public’s mind,” he said.

He pointed to his home country where an internal audit of its state oil company, Petrotrin, revealed inflated billings and the alleged defrauding of the company though fake invoices of over some TT$80M.

The audit stated that a company billed Petrotrin for the TT$80M of oil it never received.

“We have an operator of an oil field, pumps the oil off and a third party is supposed to measure. And in just a few months, they found that the volumes recorded by and reported based on which the extractor was being paid were wrong, very, very wrong, to the tune of many, many millions of dollars. And that was just for a few months. Learn from our experiences, he said.

As it relates to measuring oil, Brasington had said in answer to a question that both computerized and on-the-spot verification would be in place where someone from both government and the company will be present on the Floating Production, Storage and Offloading (FPSO) platform to check.

“Part of the commitment is that you have got three points of independent verification on numbers in terms of what’s coming in and what’s going out. It is a very robust monitoring system that we are not going to make up and it exists around the world and we’ll use it here. There will always be a Guyanese representative on the FPSO when offloading is occurring,” she said

And complimenting this country for its pristine forests, marine life and flora and fauna, Abdool said that it was up to Guyana’s citizenry and watchdog groups like TIGI to be consistently vigilant of its environment that it is not abused. One again he homed in on Trinidad and Tobago saying that before oil his country had waters where fishing was pleasurable but a negative effect could mean oil spills.

However, now, there are constant complaints of water pollution by fisher folk and residents. “Every week there are some fishermen that can’t fish …learn from our experiences,” he stressed.

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