Category: Letters to the editor

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A packaging plant will not be a magic bullet to salvage Jagdeo’s sugar decision

In making his case for an increased financial contribution to the state-owned Guyana Sugar Corporation President Jagdeo is quoted as saying that “government’s commitment to sugar has nothing to do with the workers being ‘a party support base,’ but rather with the development of the sector which contributes some 16 per cent of the country’s Gross Domestic Product.” One is never sure whether the President’s loose use of facts and data is politically driven or is evidence of his unfamiliarity with up-to-date national income statistics. In normal circumstances, he can be dismissed but not when, as in the case of the building of the packaging plant, what he mistakenly thinks forms the basis of major spending decisions.

This is what the most recent official figures published by the government show in relation to sugar’s contribution to the economy measured by GDP:

It is perhaps not without some significance but with considerable irony that GuySuCo Director Keith Burrowes used the occasion to announce his assessment of Mr Jagdeo as Guyana’s best president ever, which obviously includes Cheddi Jagan who waged a life-long struggle for sugar workers. Mr Jagdeo of course, led GuySuCo into the inadequately conceived and poorly executed US$200 million Skeldon modernization project which drove the corporation to the brink of insolvency from which its survival requires a combination of:

1. sales of a depleting quantity of sugar lands. Before a substantial sale of lands at Diamond in 2009, only 28% of the lands used to derive economic benefits to the corporation were actually owned by it;

2. the indefinite continuation of subsidised peppercorn rent of G$1,000 per acre per year;

3. the assumption/payment by the government of the corporation’s debts; and

4. various other forms of subsidy including the deferral of taxes of $2.3 billion over a five-year period without penalties.

Director Donald Ramotar has sought to distance himself and fellow directors including Mr Burrowes and Ms Gita Singh-Knight from responsibility for the plight of the corporation. This is not only legally flawed, it is also totally unfair. The political and corporate directorate has practically imposed on the management not only an unbearable debt burden, but some $1,900 million of capitalised interest at December 2009. This is a huge non-productive cost to bear and the executive management deserves the nation’s sympathy.

The problem for the corporation and for the country as a whole which Mr David Granger’s “privatization” comment did not reflect is that in its present form and with its existing liabilities it would be impossible to find a buyer for GuySuCo. A buyer would almost certainly insist on an asset purchase in which the cost of the Skeldon factory would have to be heavily discounted. That would leave the country to meet the lion’s share of tens of billions of liabilities at December 31, 2009, the last year for which the corporation’s financial statements are available.

While Mr Jagdeo will soon be enjoying a gigantic retirement package which he signed into law and under which he pays no taxes, the debts he continues to amass for the corporation and the country will have to be paid by the workers in sugar and other sectors and the taxpayers and consumers of this country. Mr Burrowes may have cause to rejoice and exult, but not those groups.

The packaging plant will certainly add value but will not be a magic bullet to salvage Jagdeo’s and the board’s stand-out sugar decision. Packaging plants are the wave of the sugar industry as several countries in Africa, Australia and here in South America expand into sugar packaging in a bid to remain competitive. Kenya’s largest sugar miller, Mumias Sugar Company (MSC) recently built, at a cost of US$3 million, a new eleven-machine, state-of-the-art packaging plant with a daily capacity of 700t, enabling the company’s packaging production capacity to increase to 300,000t per annum. Incidentally, the packaging machines for MSC were supplied by Brazilian companies Brazafric and Raumak while we trekked to India to source our plant!

With the continuing trend towards more and sophisticated packaging by the industry internationally, GuySuCo’s only hope of survival without further and more costly and unaffordable state support is to drastically cut its cost of production in line with the rest of the world. That imperative was conveniently ignored at the launch of the packaging plant.

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In discussing Vaitarna, Messrs Persaud and Singh failed to distinguish the State Forest Exploratory Permit from the TSA

When Agriculture Minister Mr. Robert Persaud held his press conference on April 12, 2011 to defend the permit/agreement over 1.82 million acres granted to the Indian company Vaitarna Holdings Private Inc., there had been very few letters and questions about the manner in which the two parcels of the land had been allocated to the company owned by Mr. Siddhartha, the coffee magnate of India. Mr. Persaud’s accusation of a “misinformation” and “sleazeball” campaign seemed therefore both inappropriate and disproportionate particularly since Mr. James Singh, Commissioner of Forests had spoken two days earlier on the matter.

In seeking to dispel concerns about Vaitarna, Mr. Singh had raised in my mind some interesting questions which I had hoped to put to him in some form. I withheld those after the Minister had said that he was “ready to debate and discuss the sector’s management stewardship, the policies and whatever is being done within the GFC, at anytime, at any place and with anyone.” It is now close to two weeks since I invited Mr. Persaud to do exactly that on Plain Talk but he has not responded to my written invitation or taken my follow-up telephone calls.

In my view, both Mr. Singh and Mr. Persaud failed to distinguish between the State Forest Exploratory Permit (SFEP), like the one previously granted to Simon and Shock International Logging Inc. (SSI) and the Timber Sales Agreement (TSA) previously granted to Caribbean Resources Limited (CRL). SFEPs and TSAs are issued and revoked under different sections and authority under the 1953 Forest Act.

SFEPs do not confer exclusive rights while TSAs do. SFEP’s are issued by the GFC under the authorisation of the Minister but only if the GFC is satisfied that the applicant, which must be a Guyana incorporated company, has adequate experience to carry on effective exploratory operations. Where there is a breach, the GFC can suspend the permit, subject to review by the President. A TSA on the other hand, permits the sale of produce and is issued by or under the authority of the President. In the case of a non-fulfilment of any of its terms, the TSA may be suspended by the Minister, also subject to review by the President.

It would be interesting to learn of any precedent of a new entrant in the sector being granted almost simultaneously an SFEP and a TSA. The intent of the Forest Act seems clear – an entity must demonstrate its capacity to deliver under an SFEP before being entitled to a TSA. Neither the Minister nor the Commissioner offered any indication that would remotely suggest that Vaitarna has demonstrated any capacity other than a keenness to get control of pristine forests covering 5% of Guyana’s forests. Instead, there is a lot to suggest that the decision was based not on any objective technical criteria but on Vaitarna’s willingness to pay $600 million, an indeterminate portion of which was for debts of CRL, a CLICO subsidiary. With such an outlay, Mr. Siddhartha, a shrewd businessman in India’s competitive and notoriously corrupt business environment will expect to recover his investment at or above his company’s cut-off rate of return, which will only come from fairly intensive operations.

With regard to the actual sums collected, both the US$254,000 and the $600 million should have been paid into the GFC from which, subject to the Act, surpluses could be paid into the Consolidated Fund. Both Mr. Singh and the Minister confirmed that the lesser amount was paid to the GFC but were ambivalent with respect to the $600 million. From a review of the Commission’s records it appears that the $600 million was paid straight into the CLICO fund, in a liquidation process that defies many laws but which the public is silent about for reasons of convenience.

It is interesting to note that the President has not assented to the new Forests Act passed in the National Assembly in February 2009, as a consequence of which it is impossible for the new Guyana Forestry Commission Act 2007 to come into operation, making the Commission more independent and autonomous. It is regrettable that even as we enter into international agreements for the conservation of our forests, we seem determined to retain legislation that is sixty years old rather than operationalise modern legislation that eliminates policy confusion, emphasises sustainable management of the forests, grants the regulator more autonomy and gives the public access to information.

If these recent Acts had been in place, it would have been harder for the Government to enter into the kind of transactions it has with Vaitarna and easier for the public to access information. This failure may have nothing to do with Vaitarna. But it may be hard to convince any informed person otherwise.

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The GLTA never demanded a percentage of the Sport Ministry’s budget

I confess to an inability to discern whether Mr. Neil Kumar’s response (S/N April 21, All expenditure under the Sports and Art Development Fund can be accounted for) to Business Page (BP) of April 17 is a measure of an innate tendency to mislead and obfuscate, a misunderstanding or misrepresentation of what was written coupled with a failure to distinguish between the President of the Guyana (Lawn) Tennis Association and Christopher Ram the incumbent. Even as he confesses – in relation to Business Page – to an appreciation of writing that impresses and persuades, he misinterprets my disclosure of interest as one of bias.

I therefore ask Mr. Kumar to read the column again and provide the taxpaying public with a more informed response to the specific issues raised therein. Until then, there are certain issues in his response that warrant some comment.

1. That the Director of Sports – an office created under the National Sports Commission Act, 1993 – should sign a letter trying to defend the Ministry of Culture, Youth and Sport for its vindictiveness, discrimination among sporting bodies and lack of transparency and accountability, confirms the incestuous relationship between the Ministry and the Commission, an independent statutory body in receipt of a subvention.

2. Mr. Kumar says incorrectly that I demanded a percentage of the Ministry’s Sports Budget to be assigned to tennis. What the GLTA did was make a request for a contribution to help finance a national team of six under-14 tennis players to participate for the first time in a world lawn tennis event. It was in response to Dr. Anthony’s categorical refusal to our request that we pointed out to the Minister that what the GLTA was asking for was the equivalent to 0.2% of the 2010 sports budget, or 20 “cents” of every one hundred dollars. Since Mr. Kumar was not at the meeting I can excuse him if Dr. Anthony misrepresented our request, which leaves the minister in a rather invidious position. Determined not to go begging the Minister again this year we undertook some audacious fundraising efforts which made it possible for our juniors to participate once again in the WJT, showing considerable improvement.

3. Mr. Kumar suggested that I should have called the Ministry for clarification before writing BP. He may wish to ask his minister and the minister’s secretary of the number of unanswered written and oral communication not only from our Association but other sports bodies as well.

He may also wish to offer some explanation for a piece of advice given to me by an officer recently that I should have someone else sign letters from our Association!

4. Mr. Kumar carefully avoided the disclosure of the ballooning cost of the swimming pool and instead takes us around to the Non Pareil tennis courts which are as much a saga as the swimming pool, in terms of time, quality and increasing, undisclosed cost.

5. Now we are told that money from the Fund went to pay for the Guyana Classics, a project headed by Dr. David Dabydeen, recently appointed Ambassador to China. Carefully, Mr. Kumar did not specify how much of the five hundred million dollars allocated to the Fund so far was paid towards that project and who were the payees/beneficiaries.

6. Since Mr. Kumar accuses me of acting on dated information, can he tell us the last year for which Minister Frank Anthony tabled in the National Assembly, as required by the NSC Act, the annual report and audited financial statements of the NSC.

7. Finally, in connection with the status of the NSC, Mr. Kumar’s response is revealing indeed. He should ask its former Chairman Mr. Conrad Plummer why he has consistently disavowed association with the NSC and whether it was not because the NSC had been defunct and dead for several years. Overcome by the spirit of Easter, Cabinet we are now told has resurrected it!

To use a term in doubles tennis, the ball is now in Mr. Kumar’s and his Minister’s court.

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Serious questions remain about the LCDS including the wisdom of putting Norway funds into the Amaila project

Despite its Stalinist ring, the request to Transparency International by acting Minister of Foreign Affairs Mr. Manzoor Nadir for a purge of the board of Transparency Institute (Guyana) Inc. (TIGI), a civil society group, is no surprise. Similarly, his falsehood that TIGI director Gino Persaud was “removed by the Government from the University Council” and his references to familial connections are entirely consistent with the evolution of the political behaviour of Mr. Nadir.

Not surprising either is President Jagdeo’s threat to host a press conference to deal exclusively with civil society activists Dr. Janette Bulkan and me over a letter on the LCDS signed by a group that includes the two of us. That too has become par for his course. Whether he will carry out that promise is uncertain given his surreal Saturday Night forgiveness fiesta and epiphany.

The venom in the statements by Messrs. Jagdeo and Nadir show how intolerant the Jagdeo administration has become of independent voices and critical views. I have no authority to speak for TIGI, the directors of which are quite capable. I do however feel compelled to respond to the attacks on my colleagues who signed the open letter for their “blasphemy” in expressing their well-grounded fears of abuse of LCDS money by a government that constantly shows only a cynical interest in openness, transparency and accountability and audit of public funds. A government that seems able to find from nowhere sometimes hundreds of millions of dollars to pay for spy equipment, for laptops and for various improper activities.

I assume those associated with a counter-letter under the Jagdeo-led Multi-Stakeholder Steering Committee (MSSC) did in fact read the letter in full and not rely on the government’s misrepresentation of it. To them I wish to pose the following issues relevant to the LCDS:

1. No matter how inevitable, any change in policy has winners and losers. How does the prioritization of the spending projects take account of and compensate, whether by way of cash compensation, retraining or otherwise, some of the biggest losers such as the forestry and mining sectors and their thousands of employees and small operators.

2. Our first peoples deserve reparations and appreciation of the rest of the country. But they also deserve our honesty, not hypocrisy. For four years until I called for action, the Government refus-ed to pay the Amerindians their share of royalty under the Amerindian Act.

3. Under the Guyana-Norway MOU, the Amerindians are not bound by the constraints of the LCDS and can choose to opt in or stay out of the LCDS. They are required to make no sacrifice but are the first in line for rewards. The LCDS is a country project not an ethnic initiative. If the Norwegians wish to assist the Amerindians then they should contribute to an Amerindian Fund.

4. By its patronizing attitude the government is creating a charity, entitlement culture among Amerindians who simply sit back and ask when is the money coming rather than consider among themselves steps to exploit their unique traditional knowledge, their culture and the resources they control.

5. The delay in disbursements is not due to any failings by Norway, the World Bank or members of civil society. It is because the Government has failed to submit proper project proposals which are ready for implementation. At this stage all they can advance is land titling and solar panels for the Amerindians and equity in Fip Motilall’s hydro-electricity project.

To the Government’s credit, land-titling under the Amerindian Act is a low cost administrative exercise which since 2006 has been funded out of the national budget. It does not need LCDS money.

6. The alternative energy initiative is being funded by the IDB and again does not require LCDS money.

7. That leaves the hydro-electricity project spearheaded by a man who has consistently failed to meet his contractual obligations to this country and its people. Under a licence granted to him in 2002, Mr. Fip Motilall’s company was supposed to provide thermal power as an interim measure and commence construction of the Amaila Hydro-Electricity Plant. He did not supply the thermal plant but the Government renewed/extended the licence in 2004, and again in 2006 for one year which means that it would have required further extensions to remain current. That information is not public.

8. Despite all of that bad experience, in 2009 the government awarded Synergy a road project contract under an unlawful process managed by an unlawfully operating government company NICIL. Which businessperson in their right mind would agree to put their money into his company which did not realize that it needed first to have a road to the plant site before it could build the plant?

9. The hydro-electricity plant would revert to the state after an already agreed period with no financial input by the Government. By putting LCDS funds into the company the country is paying for an asset the residual ownership of which is already agreed to be vested in the state. If we are to put money into the project why should Motilall remain in control? Now that we have a Procure-ment Act should we not put the project out to tender? Is the best use of the Norwegian-sourced money rushing headlong into what will amount to a joint-venture with and controlled by Mr. Motilall?

10. Like its comparator the PNC, this government has a poor record on accounting and transparency. But in terms of truth and integrity, this government is in a class of its own. Relevantly, can Mr. Peter Persaud and Mr. Clinton Urling – no doubt well-intentioned and well-informed persons – who have written critically of the letter by Dr. Janette Bulkan and others, tell us how they knew of the Siddhartha 1.8 million acres deal which had been hidden from the rest of the country and possibly the Multi-Stakeholder Steering Committee?

11. I would like too to hear from the informed members of the SSMC about the carbon footprint of the deal with Siddhartha and whether it is compatible with the ethos and concept of a low carbon development strategy.

With all respect to the Amerindians land titling is not a low carbon issue and what do we do with the annual average US$50 million we will receive while Mr. Motilall takes his time in building our hydro-electricity facility? Put it all into his company? I hope the businesspersons on the SSMC would ask their Chairman Mr. Jagdeo to publish the Licence, agreements and extensions with Mr. Motilall before any public funds are put into his company.

Finally, let me say this to Jagdeo, Nadir and those who feel compelled to attack Dr. Bulkan and other members of civil society. I consider Dr. Bulkan and all the other signatories to our letter, capable, patriotic and courageous. I have never distanced myself from such persons and am proud to be associated with them – cuss or no cuss.

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Guyana does not observe the eight sub-rules of the rule of law

Mr Anil Mohabir Nandlall evades my request (‘Not the rule of law’ SN, March 22) for him to state his opinion as to whether Guyana observes Lord Bingham’s eight sub-rules of the rule of law and instead immodestly invites me to examine his legal career: (‘Not a response to letter on mischief caused by prescriptive title’ SN, March 25). I leave an examination of his career to those with the interest, time and inclination to do so, but welcome the opportunity to examine his assertion that “the presence of the rule of law in a society… can be measured by an examination of the workings of the democratic institutions in the society.”

While Mr Nandlall and I may differ on their order of importance, we can at least agree that the principal institutions include the constitution itself, the president, the state, the parliament, national elections, local government elections, the judiciary, the Ombudsman, the Director of Public Prosecutions, the police force, the Audit Office and the Public Procurement Commission. Let us examine them.

1. A fundamental tenet of the rule of law is that all are equal in the eyes of the law while our constitution endows one person with the privileges and immunity of a monarch under the divine right of kings doctrine. Mr Nandlall’s hero Cheddi Jagan, had vowed to change what he and his party referred to as the Burnham constitution, a constitution that hangs like an albatross around the nation’s neck, notwithstanding the timid changes under the St Lucia Accord. If at least ten articles of the constitution have not been operationalised, do we need further evidence that even this “undemocratic” constitution is not working?

2. Few would dispute that over more than a decade, this President has routinely violated the constitution, the Fiscal Management and Accountability Act 2003 and the Procurement Act 2003, broke (tax) and bends (procurement) laws to help his friends; creates jobs for his political cronies whose sell-by date has long expired; heads an office where procurement takes on a special meaning; and who surrounds himself with persons not deserving of respect. In short, the Office of the President is the very antithesis of the rule of law and the constitution.

3. The state’s “supreme organs of democratic power” are spelt out in Article 50 of the constitution as the president, the parliament of which he is a part and of which he plays an important role in the appointment of the majority, and the cabinet which is an advisory body to the president, making the three organs largely embedded in a single individual. Is this Mr Nandlall’s concept of democracy and the rule of law and does it explain why the constitution is so frequently violated by the President with impunity, whether in relation to assenting to bills and the naming of constitutional commissions and office holders? Perhaps I can ask the learned counsel to explain the constitutionality of the President’s refusal to assent to Bill No.18 of 2000 dated December 15, 2000 and unanimously passed by the National Assembly on January 4, 2001. Let me remind him that this was no ordinary bill but one that sought to elevate certain articles from principles to fundamental rights for citizens. In any democratic country where the rule of law prevailed the President would have long had to resign.

4. And what about the National Assembly whose productivity is modest by any standard, whose priority does not see a flooding of agricultural land as a matter of urgent public interest, which regularly passes laws that are a violation of the constitution, whose members represent no one but a political party, who vote for bills they have never read or cannot understand and who receive generous duty-free concessions and qualify for pensions at the age of forty? And that protects at all costs a Minister who misleads the House about a small matter of $4B of public money!

5. National elections which are characterised by playing to ethnic and racial sentiments and insecurities (Babu John annually), patronage, bribing of sections of the electorate by the incumbent, misuse of state funds and justifying it as the privilege of incumbency, and political parties operating outside of a legal framework. Those things distort the fairness of elections and are a real threat to democracy as political debts have to be paid, often with tax immunity, special contracts and other favours.

6. I doubt that Mr Nandlall would consider the absence of local government elections since 1994 as anything but a cynical and gross violation of Article 12 which states that “local government by freely elected representatives of the people is an integral part of the democratic organisation of the State.”

7. The courts which are the guardians of the constitution and the citizens’ rights are hobbled by a law that takes away their independence while the constitutional requirement for consultation between the President and the Leader of the Opposition on the appointment of the head of the judiciary is bypassed by an acting appointment.

8. An Ombudsman, the people’s judge, has not been appointed for six years so that the poor have no avenue and opportunity for redress. That needs no comment, either about democracy or the rule of law.

9. And no discussion on the rule of law can exclude the police that in this major drug transshipment country cede their duty and responsibilities in drug case investigations; whose operational efficiency and independence are often compromised by a telephone call from the politicians; which selectively investigate a blog site critical of the government but refuse to act on another friendly to the government; which needed a drug lord to fight a crime wave; and which is involved in a struggle with its Minister as to who should and should not get a gun licence.

10. The Audit Office, the guardian of the public purse is handicapped by the acting appointment of an unqualified head and compromised by a conflict of interest involving its deputy. No wonder then that it cannot yet publish its 2005 flood report or the 2007 Cricket World Cup report; that it conveniently ignores the improprieties of the big-spending ministries and big ticket items in favour of the checking of vehicle log books and ineffective special investigations on poor people at the Palms and in receipt of pensions.

11. And even as we spend more and more billions on contracts of dubious benefit, quality and authority, the government has refused to establish the constitutionally mandated Public Procurement Commission so that Fip Motilall’s multi-billion dollar contract can pass through NICIL with its huge slush fund, and another multi-billion dollar contract is awarded to a Chinese company, Huawei, now involved in the Laptop scandal.

The litany of violations by these instruments of democracy and the rule of law is long and depressing enough to cause some to refer to Guyana as a failed state. I do not share that view, but rather consider it a dysfunctional state administered undemocratically, that facilitates, permits and protects illegalities and improprieties by a certain class. I am interested to hear Mr Nandlall’s explanation for these phenomena under a government that has been in place for eighteen years, and the reasons why he thinks the party of Cheddi Jagan is unwilling to introduce access to information legislation to give effect to Article 146 of the constitution.