The future of GuySuCo and sugar – the Commission of Inquiry

My last blog post followed the announcement at the annual Enmore Martyrs Day observance that the Cabinet had approved bailout money for the ailing state-owned Guyana Sugar Corporation (GuySuCo). The announcement of some $3,800 million of bailout money was reported in the Stabroek News of June 17. One week earlier, the Minister of Finance had been reported as stating that Parliament was the body to approve any bailout. Seems bailout was done anyway, without parliamentary approval. And as some have suggested, in violation of article 219 (3) of the Constitution which permits only expenditure on the public services when there have been elections and no budget.

There was at the time an indication that a Commission of Inquiry would be appointed and I welcomed it on what I understood such Commissions of Inquiry to be. Not too long afterwards, consistent with a commitment made in the APNU + AFC Manifesto, the Minister of Agriculture announced such an Inquiry into the operations of the Corporation.

The Commission’s members are: Mr. Vibert Parvattan (Chairman), Prof. Clive Thomas (Financial and Economic Analysis), Dr. Harold Davis and John Piggott (Agronomists), John Dow and Joseph Alfred (Factory Operations), George James (Sugar Processing), Nowrang Persaud (Industrial Relations), Claude Housty (Marketing) and Mr. Seepaul Narine, a representative from the main sugar workers’ union GAWU.

By my reckoning the majority of the members have had some association with GuySuCo and bring relevant experience to the exercise. But even relevant in this case seems inadequate. For starters, it seems both misleading and a misnomer to call the body a Commission of Inquiry. The members were appointed not by the President under the Commission of Inquiry Act but by the Minister of Agriculture as an administrative act. And significantly, the focus is more about GuySuCo than about sugar generally.
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GuySuCo bailouts unsustainable

The debt-ridden, loss-making, misdirected, mismanaged and ailing Guyana Sugar Corporation is the beneficiary of another bailout. This time we are told that Cabinet has approved a first tranche of $3.8 billion, or the equivalent of just under US$19 million. The announcement was made by Prime Minister Moses Nagamootoo at the observance of Enmore Martyrs Day, an occasion that has become a signature political event in Guyana. There was no indication whether the $3.8 billion is tied to any project, activity or otherwise, such as the payment of any debt obligations.

The PPP/C which gained the overwhelming support of sugar workers in the May elections had campaigned on a pledge to pump $20 billion into the ailing industry. And some days before the announcement of the bailout but after the elections, the now fired CEO of the Corporation had said that the Corporation needed $16B to avert an industry-wide shutdown.

Whatever the eventual bailout number will be, it is likely to be huge. Yet, the Granger Government could not risk a shutdown of the industry. Whether as the sole shareholder in GuySuCo, or as the Government, there had to be some decisive intervention. That however, does not make the circumstances any more comforting.

The announcement was made not by the Minister of Agriculture or the Finance Minister but by the Prime Minister whose portfolio centres around information. The use of the term first tranche obviously suggests further tranches and is not particularly reassuring. How many tranches can we expect and what would be the value? And significantly, where would the money come from?
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Expenditure on new ministries would be unconstitutional

The Guyana Times of Sunday May 24 (New Ministries created by Granger illegal – PPP/C) reports former President Bharrat Jagdeo and former Attorney General Anil Nandlall as stating that “the formation of new Ministries is illegal since monies cannot be released to those entities, which are not represented in the Appropriation Act.”

This is a bit ironic. President Donald Ramotar did exactly that when he created the new Ministry of Natural Resources and the Environment and appointed Mr. Robert Persaud as the Minister. This was long before the convening of the Tenth Parliament and the passage of the Appropriation Act 2012, assented to on April 30, 2012.

The fact that the PPP/C created a new ministry before any Appropriation Act was passed does not itself make President Granger’s action legal, or illegal. In fact, the creation of a new ministry in 2012 by the PPP/C was as legal as the creation of new ministries by the APNU+AFC in 2015. Article 100 provides for offices of the Prime Minister, Vice-Presidents and Ministers of the Government as may be established by Parliament or, subject to the provisions of any Act of Parliament, by the President.

Article 120 of the Constitution gives the President the power to constitute offices for Guyana [and] make and terminate appointments to such offices…” There is no requirement for an appropriation Act before the creation of any ministerial or other constitutional office and It would have been useful for Mr. Jagdeo or Mr. Nandlall to have pointed out the illegality of President Granger’s combined acts.

The Cabinet has a number of lawyers, two of whom are affected by the creation of these new ministries. I have no doubt that all these lawyers would have considered the constitutional ramifications of the action by President Granger and offered their views to the Attorney General, who is the principal legal adviser to the Government.

Notwithstanding the legality of the appointments, it does appear to me that the Constitution forbids the expenditure of any money on those ministries without parliamentary approval. Article 120 goes on to state that “where the constitution of, and making of appointments to, such offices involve expenditure chargeable on the Consolidated Fund, such expenditure shall be subject to the approval of the National Assembly.”

In my view “approval” in this article can only be reasonably interpreted to mean prior approval, and not approval by way of any subsequent, supplementary Appropriation Act. On my interpretation, any expenditure on these new ministries, including any payments to and for the ministers and the supporting ministers, would be unconstitutional.

Another GECOM let down

Once again, the role of GECOM in the determination and publication of the results of national and regional elections as well as its general functions have been highlighted. GECOM as it exists today is the product of the efforts to address widespread concerns that elections prior to 1992 were not free and fair. A limited reform process resulted in the 1992 elections being conducted under a seven-person Commission made up of three members named by the Government, three by the Opposition, and the Chairman selected by the President from a list of six names submitted by the Leader of the Opposition is often referred to as the [President] Carter formula.

While politically the formula was considered acceptable since both “sides” of the divide felt represented in the process, it was intended to be a temporary arrangement to be reviewed for subsequent elections. Inertia set in and the formula has remained unchanged for all five elections since 1992. It should not continue.
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Mr Nawbatt’s campaigning an abuse of state resources

There were credible reports that on Elections Day 2011 Minister of Foreign Affairs Ms. Carolyn Rodrigues-Birkett was out campaigning for the PPP/C in the hinterland Amerindian communities. If that was not a violation of the Representation of the People Act it came very close.

It seems that Ms. Rodrigues-Birkett is at it again this year and has brought in the Guyana High Commissioner to Canada Mr. Harry Nawbatt to campaign with her in those communities, exploiting his work as a Contract Employee with SIMAP some years ago. (See Stabroek News May 9, 2015 `Envoy to Canada campaigning for PPP/C in Rupununi’). This is particularly troubling not least because Mr. Nawbatt is an election official for the voting by those Guyanese eligible to vote by virtue of their employment in Canada.

Fortunately there are scores of observers for the elections tomorrow and I am sure that they are taking note of the misuse of state resources by the PPP/C in this campaign. I hope too that GECOM, which has the constitutional and statutory duty to hold elections that are free and fair, is also taking note.

I am confident that the Coalition will win these elections despite the grievous abuses of state resources by the PPP/C, its ministers, high commissioners and other public officials. Among the many tasks the Coalition in Government will face is to mandate GECOM to make recommendations and proposals to prevent such abuses ever taking place again in Guyana. Such reform is long overdue.