Category: The Road to First Oil

Every Man, Woman and Child in Guyana Must Become Oil-Minded – Column 155

Introduction

The National Assembly is scheduled to meet today, as the 12th Parliament moves to a close in preparation for historic elections. The Prime Minister will lead the second reading of the Oil Pollution Prevention, Preparedness, Response and Responsibility Bill tabled last week. At first glance, the unsuspecting reader and observer may believe that the law set out in the 56-page, 39-clause Bill, arranged over eleven parts from Preliminary to Miscellaneous, is progress and development. They would be dangerously mistaken.

Beneath this technical jargon and smooth veneer lies a troubling reality: this legislation may weaken the very protections it purports to strengthen. Perhaps most strikingly is the suspicion that one of the hidden objectives of the Bill is to neutralise the decision of Justice Sandil Kissoon in the successful action brought by Fred Collins and Godfrey Whyte vs. the EPA and (conveniently joined by) ExxonMobil Guyana. If that suspicion is true, it is infinitely worse than the Government seeking to reverse a ruling by the High Court for which an appeal is pending. Such practice is not unusual but is usually only done to plug loopholes and fix lacunae. In this case, it seems designed to relax the regulatory controls over which Exxon appears to call all the shots.

Legislative reversal of Kissoon

To recap, in the Collins and Whyte case v. EPA, Justice Kissoon found that ExxonMobil’s Guyana subsidiary, a major oil company, had operated for eleven months in violation of its permit by failing to provide unlimited liability insurance. Meanwhile, the EPA had “descended into a state of slumber” and acted as a “derelict, pliant, and submissive” regulator.

If the Government persists with this Bill, it is not just legislative malpractice but another egregious abandonment of the national interest, in which we moved from the President’s “Review and Renegotiate to supine capitulation. In close to five years, this Government has failed to close a single annual audit; it refuses to use its powers to set any conditions, such as ringfencing, in production licences. It has engaged in secret deals with Exxon concerning the Gas – to – Shore and, most incredibly, has not enforced the mandatory relinquishment clause in the Agreement.

Despite representing “one of the most critical environmental and economic bills ever presented to our Parliament,” this legislation is being fast-tracked without adequate scrutiny. The Bill’s technical provisions, multiple bodies, unconnected parts, divisions, and sections without clear interconnection, as well as vague drafting that special interests can exploit, make for an almost unworkable arrangement.

MBA – style creation

The legislation creates at least five major bodies: the Civil Defence Commission (as the “Competent National Authority”), its six-member Governing Board, a National Oil Spill Committee with over 20 agency representatives, ad hoc Oil Spill Incident Boards of Inquiry, and a National Emergency Operations Centre. Inescapably, 95% of all these positions are directly appointed by the Minister, with the remaining 5% being ex officio appointments of officials who were themselves politically appointed, creating a system where political loyalty takes precedence over technical expertise. This legislative masterpiece is worthy of a special case study at Harvard Business School under “Advanced Organisational Dysfunction: A Masterclass in Bureaucratic Architecture.” 

This maze of institutions, all operating under vague mandates with unclear lines of authority, virtually guarantees bureaucratic paralysis when swift action is needed. Rather than streamlining response capability, the Bill spreads functions and responsibilities across multiple layers of bureaucracy, creating enough regulatory confusion to allow oil companies to operate with even greater abandon. At the same time, appointees can always point to some other body as being responsible for enforcement. When a spill occurs, who exactly is in charge? The Bill’s answer seems to be everyone – and no one. A disaster dressed up as comprehensive governance.

Taxpayers Pay – Exxon creams

As the structure goes, so do the financial arrangements. Typically, in regulated sectors, it is the players who fund the regulators through a levy. Not with this Bill. The entire elaborate bureaucratic ecosystem – five major bodies, dozens of appointed officials, multiple committees, emergency centres, and boards of inquiry – is funded entirely by Guyanese taxpayers through the Consolidated Fund. This allows the oil companies to operate in Guyanese waters, as the ultimate spillers and polluters of Guyanese shores – and beyond.

What makes this sellout particularly galling is how it exceeds even ExxonMobil’s original expectations. The oil giant has operated for years, knowing it needed unlimited liability coverage – that was the deal from the start. Justice Kissoon insisted on the enforcement of existing obligations.

Clause 22, in plain terms, removed that obligation and placed it on a motley group of ill-defined entities known as the responsible party. In contrast, Clause 21 can be read to render a parent company’s guarantee invalid. Clyde & Co told us that Exxon’s Brook Harris wrote the Cabinet Paper recommending the signing of the 2016 Agreement. I have serious doubts that Brook Harris could have done a better job on this one. Or maybe Brook Harris has a twin. To be continued

Every Man, Woman and Child in Guyana must become oil-minded. Column 155

Introduction

The controversy over tax certificates issued to oil companies continues unabated. On March 17, the Minister of Parliamentary Affairs and Governance responded to the Oil and Gas Governance Network’s information request by suggesting that tax details could be found in Commercial Registry filings – a claim I discredited in my March 21 column as both factually incorrect and legally flawed.

Now, the overzealous Joel Bhagwandin has entered the fray with a March 25 letter attempting to “simplify” what he calls an “unnecessarily complicated” issue. In his quest for simplicity, however, Bhagwandin has simplified reality itself away. He states that “the profit share paid to the Government is treated as the taxes paid by the US oil companies, and it is this sum that the tax certificate in question is based on.” The vacuity of this statement is quite remarkable. If profit oil magically transforms into tax certificates, surely this fiscal alchemy must leave some trace in our public accounts? Yet the National Estimates show no such entries, and it would be helpful if Mr. Bhagwandin could say where these are concealed. 

Confusion

He compounds his error by claiming that “the profit share due to the Government is reported on the financial statements as the oil companies’ tax liabilities.” One wonders which financial statements Bhagwandin has been reading – certainly not those filed by Guyana’s oil companies. These documents show no such thing. The companies recognise only their portion of profit oil as income, and certainly no evidence of the Government’s share being recorded as tax liabilities.

He also appears to be confused about the distinction between payment “on behalf of” and payment “in lieu of” – two distinct legal concepts. Article 15.4 of the 2016 Petroleum Agreement states that “a sum equivalent to the tax assessed… will be paid by the Minister to the Commissioner General of the Guyana Revenue Authority on behalf of the Contractor.” A payment “on behalf of” is one you make for someone who remains obligated to pay; a payment “in lieu of” substitutes for the original obligation. His quotation is correct but is totally misconstrued. The Agreement specifies the former, while Bhagwandin’s explanation suggests the latter.

Magic wand

This is not merely semantic. The distinction determines whether actual money must change hands or whether profit oil can be waved about like a magic wand to conjure tax certificates. Bhagwandin correctly notes that this arrangement exists to satisfy US tax laws but fails to follow his logic to its conclusion – if certificates satisfy US tax authorities, they must represent actual transactions, not paper fiction.

The government finds itself in a legal and accounting quagmire of its own making. Unable to reconcile the requirements of the 2016 Petroleum Agreement with proper financial management, it deploys surrogates to confuse rather than clarify. The 2021 Natural Resource Fund Act further complicates matters. Because its framework for payments out of oil revenues does not permit this tax arrangement, it does not mean that the Government no longer has any such obligation. Exxon wants every drop of blood, sorry oil, and has been insisting on that certificate. After all, as the mantra goes, it is all about sanctity of contract.

The Commissioner of Information has become the Commissioner of No Information – deflecting, ducking, and dodging legitimate inquiries. In response to my formal request for details about these certificates, the Commissioner questioned whether I had searched for “critical financial records” – whatever that means – instead of addressing the substance of my questions. Corporate filings at the Commercial Registry could not possibly contain information about tax certificates issued by the Guyana Revenue Authority. We are, therefore, left with no evidence of tax payments and no information on tax certificates. 

Conclusion

It may seem to some that in a petroleum bubble, opacity, obfuscation, dereliction, over-simplification and incompetence do no harm. In fact, they are critical ingredients of the resource curse for the country. Dismissing unusual and complex fiscal arrangements as “simple matters” does severe damage to those they seek to help, to themselves and to their reputation. Let us get back to these straightforward questions that require direct answers.

What is the amount of corporation tax paid by the Minister of Natural Resources on behalf of the oil companies from 2021 to 2024?

Are these payments reflected in the revenue of the Guyana Revenue Authority and the Consolidated Fund?

What is the exact value of tax certificates issued to each oil company since production began?

If the GRA did not issue the certificates, who did?

Now, that is simple.

Every Man, Woman and Child in Guyana Must Become Oil-Minded -Column 154

Introduction

By its very name, the Ministry of Governance and Parliamentary Affairs should defend and advance democracy, promote and ensure transparency, and strengthen and enforce accountability. Regrettably, the Ministry, in pursuit of the party’s agenda, is increasingly a convenient vehicle for political deflection and democratic reversal, where Parliament is reduced to a rubber stamp for government (read Party) plans and governance is engineered to serve narrow interests rather than the public good.

This was evident in a recent response from the Ministry, which, rather offensively, dismissed a legitimate request by OGGN, a civil society organisation, for information about oil tax payments and access to information. It would have been to its credit if it had simply advised the OGGN of the statutory framework for accessing public information. Instead, it misrepresented the law, ignored glaring conflicts of interest, and deflected the issue of accountability.

Law is the bedrock, information is the oxygen

The Ministry knows that law – including the Constitution – is the bedrock of governance and that information is the oxygen of democracy. Without compliance and sanctions, laws become hollow instruments, existing on paper but non-existent in practice. Given its mandate, the Ministry should ensure these principles are applied in every sphere of government. It should strengthen mechanisms allowing free and open access to information – not shielding the government from scrutiny. Instead, it has chosen to defend a system in which:

The Commissioner of Information is neither independent nor effective. In the meme “family, favourites and friends”, the Commissioner’s son is a minister, his wife chairs the Teaching Service Commission, and his office is his home! A more egregious combination of conflicts is hard to imagine.

Just coincidentally, the Commission has not filed an annual report since 1996!

Parliament is merely a tool for government use, convened when an appropriation bill is needed, or legislation passed to fulfill some international obligation or domestic unavoidable need. Under this form of governance, parliament can never function as a meaningful check on executive power. And, of course, in another part of the tripod, the Speaker’s role appears to be to restrict and, as necessary, prevent meaningful debate.

Proper governance is practically absent, with constitutional safeguards twisted to accommodate political interests. The all-important Judicial Service Commission and, to a lesser extent, the Constitutional Reform Commission stand as examples of how institutions meant to strengthen democracy can be sidelined and manipulated.

The Integrity Commission, often held up by the Ministry as a bastion of accountability and guarantee against governmental corruption, has never filed an annual report of its performance. Currently chaired by the wife of a late PPP/C Minister, the Commission has been filing annual audited financial statements that are only part of the annual reporting process.

Troublingly, this Commission seems to be operating as a mere repository with no sample audits or reviews undertaken by the Commission.

A weak and ineffective Access to Information System

The Ministry must be in self-delusion to think that Guyana’s Access to Information framework has served any purpose other than its own or can somehow be compared with that of Canada. It knew about the weaknesses in the Act before its introduction when the Transparency Institute of Guyana Inc. raised concerns in 2011. Yet, no amendment has been made to ensure its proper implementation, let alone strengthen the law.

This impotence starkly contrasts with Canada, which has continuously improved its own Act, most notably through Bill C-58 in 2019, which expanded the law’s scope, strengthened the powers of the Information Commissioner and introduced mandatory proactive disclosure obligations.

While Canada refined its legislation to promote openness, Guyana’s Access to Information framework remains stagnant and ineffective. The claim that Guyana’s Act was “modeled wholesale” on Canada’s is false in many fundamental respects:

Canada’s system is decentralised, meaning requests go directly to the government agency holding the records. Guyana’s centralised model forces everything through the Commissioner of Information, frustrating the process to make it non-operational.

Canada’s Commissioner of Information has enforcement powers and can order disclosures. Guyana’s Commissioner lacks meaningful authority and serves more as a postbox than an active entity.

Canada’s Office of Commissioner of Information has an active website full of information, advice and assistance. That of the Guyana Commissioner does not even have a letterhead, much less a website, and an “office” inaccessible to the public.

False Claims, Misdirection, and a Lack of Accountability

The Ministry’s response to the Oil and Gas Governance Network (OGGN) was factually incorrect and legally flawed. It claimed that companies in Guyana are required to file their tax returns with the Deeds and Commercial Registries Authority. This is false – tax filings are made at the Guyana Revenue Authority (GRA), not the Deeds Registry. Either the Ministry does not understand essential corporate compliance, or it is deliberately misleading the public. That is deliberate prevarication. The issue is not about financial statements but about whether or not certificates of assessment were properly issued, why the payments to support the certificates were made, and how they are accounted for. 

The Ministry is not even responsible for the Access to Information Act. Yet, it attempted to dismiss concerns about transparency while failing to address why the sole Commissioner of Information has been unresponsive and unproductive.

Conclusion

While the Ministry discredited itself with inappropriate language and style, citizens like Anand Goolsarran and Alfred Bhulai and organisations like TIGI and OGGN wait in vain for basic information on the petroleum sector. A Ministry that is properly informed and genuinely committed to governance would facilitate citizens. It would elevate Parliament to its proper role as an oversight body rather than reducing it to a rubber stamp for government approval. Such a Ministry would hold other ministers accountable for legal obligations, including filing annual reports as required by law. It would treat transparency as a fundamental democratic value rather than a threat to be contained.

Every Man, Woman and Child in Guyana Must Become Oil-Minded – Column 153

“The OECD/G20’s Pillar Two framework mandates that all in-scope MNEs (multi-national enterprises) pay a minimum effective tax rate of 15% on profits in each jurisdiction. The Bahamas must act decisively to ensure that these taxes are collected here, rather than abroad”: The Bahamas Government

Introduction

In a development that would be almost comical were it not so devastatingly costly to Guyana, The Bahamas is now poised to collect taxes on income earned by Exxon from Guyana’s oil wealth. Contrast that with Guyana, whose government, despite widespread calls for similar action, refuses to exercise its sovereign right and power to tax all income earned in Guyana. The Bahamas’ initiative-taking adoption of the OECD’s Pillar Two framework exposes Guyana’s fiscal negligence and its leaders’ spineless subservience to ExxonMobil and multinational interests. The framework ensures that multinational enterprises pay a minimum tax of 15%.

Guyana’s refusal to adopt the OECD framework reveals an uncomfortable truth: our government has actively given up billions in revenue rather than even suggesting that ExxonMobil and its partners Hess and CNOOC should pay taxes on its hefty profits from Guyana. This active, deliberate and calculated inaction has led to the absurdity where The Bahamas, a country with only sand, sea and shells, will soon generate more tax revenue from Guyana’s oil industry than Guyana itself!!

The Bahamas is known for its tax haven status, but the country wants to collect revenues from its multinationals and stand alongside countries that take their reputation seriously – at least until Exxon finds another country to shield its Guyana profits.

The Cost of Inaction: Billions Lost, No Accountability

No one should be fooled that Guyana’s refusal to join the OECD framework is an oversight -it is a manifestation of the country’s leadership kowtowing to Exxon and Hess over the interest of their own people. They know that if they sign on, they must commit self-styled heresy by charging tax on Exxon. Unfortunately, this is not their only show of loyalty to Exxon. Their refusal to utilise the renegotiation clause in the 2016 Petroleum Agreement already stands as a glaring example of fiscal surrender, with Guyana not only waiving its right to collect taxes but also reimbursing ExxonMobil for its tax obligations and providing receipts for taxes Exxon and Hess never actually paid.

This is not about legal constraints or contractual obligations – this is about a government that has chosen to protect ExxonMobil from taxation rather than safeguard the financial future of its own people.

Giving away the Billions

It is estimated that Guyana has already given up around three billion United States Dollars in taxes which the oil companies should have paid since 2020. To put this in perspective, The Bahamas anticipates generating approximately US$$140 million annually through its new tax measures, applied across its entire economy. Given the vast scale of ExxonMobil’s operations in Guyana, our potential revenue under the same framework would dwarf this figure multiple times over.

The Flimsy Justifications for Guyana’s Tax Giveaway

Government officials, from President Irfaan Ali to Vice President Bharrat Jagdeo, continue to hide behind “contract sanctity” rhetoric to justify this inaction. Yet, their arguments collapse under even the most basic scrutiny. While The Bahamas is demonstrating the ability of a small nation to assert its tax sovereignty, Guyana’s leaders remain silent on why they refuse to do the same.

Former Prime Minister Samual Hinds has jumped on the Exxon Train and recently claimed that Guyana’s 2% royalty and profit-sharing arrangements compensate for the complete tax exemption granted to ExxonMobil. This is nineteenth-century, misleading, and fiscally irresponsible. No other oil-producing nation has accepted such terms, and the insistence on defending them reflects either shocking economic mismanagement or deliberate efforts to placate corporate interests at the expense of national development.

What contract sanctity?

It seems that the Government is engaged in some dodgy accounting regarding the taxes to be paid to the Guyana Revenue Authority. Under the 2016 Agreement, those funds should come from the government’s share of profits. But as we know, the 2021 Natural Resource Fund Act limits the use of the NRF funds. That, as lawyers would say, is an amendment by implication. However, an examination of the Government Estimates shows that there is no collection by the GRA, so the question then is who issued the Tax Certificate since it is not the GRA.

The inevitable question is whether Exxon accepted the amendment to the tax payment provision in the 2016 Agreement and whether there is some off-the-book arrangement between the company and the Government of Guyana.

Conclusion

The stark absurdity speaks for itself: The Bahamas, a country of sand and sea, will soon collect more tax from Guyana’s oil wealth than Guyana itself. While The Bahamas boldly asserts its rights under the OECD framework, Guyana’s government remains locked in what can only be described as an unholy alliance with ExxonMobil – providing tax receipts for unpaid taxes, refusing to renegotiate terms, and refusing to sign on to an international tax framework thereby surrendering billions in revenue. To describe this as fiscal negligence is too kind. It constitutes a deliberate betrayal of national interests that transforms Guyana’s oil blessing into a case study of corporate colonialism in the 21st century.

The Information Blackout: Oil Transparency and the Failure of Access to Information in Guyana

Introduction

Guyana’s Constitution identifies access to information as a right – not a privilege. Yet, for a decade and more since the Access to Information Act was passed in 2011, this right has been treated with contempt. The Office of the Commissioner of Information’s ongoing obstructionism reflects more than a question of competence – it is a deliberate affront to transparency and accountability.

Last Sunday, the North American NGO, Oil and Gas Governance Network (OGGN) pleaded for information on the taxes the Government of Guyana paid for the oil companies operating in the Stabroek Block. In yesterday’s Stabroek News, civil society activist Danuta Radzik eloquently highlighted similar frustrations in attempting to access public information from the Environmental Protection Agency. These letters underscore how the barriers to information access extend beyond the oil sector to affect various aspects of civil society oversight and citizen engagement.

While these public demands were not made using the Access to Information Act, they highlight the frustrations and obstructions in obtaining basic information on matters of public interest. Not that OGGN or Danuta would have had better luck if they had. The Act had many weaknesses from its inception, but these pale compared to how it has been operationalised by its sole Commissioner, Charles Ramson, S.C.O.R, former Justice of the Court of Appeal and Attorney General under an earlier PPP/C Administration.

Dysfunction

Former Natural Resources Minister Raphael Trotman retained the British law firm to investigate the circumstances surrounding the signing of the 2016 Petroleum Agreement. I had managed to obtain the report, but critical appendices were missing. So, on 6^th December 2021, I wrote to the Commissioner what should have been a straightforward request for information under the Access to Information Act 2011. In his acknowledgment, he advised that his Office would provide “an appropriate response”, subject to human and other resources.  

Acting on the Commissioner’s oral advice, I later directed a letter to the Ministry concerned. Not having had a response for more than a year, I sent the Commissioner a formal request to the Commissioner of Information using the Form set out in the Act, along with a letter pointing out the Minister’s non-response. The Commissioner’s letter dated May 10, 2023, was a masterpiece of verbose evasion. Rather than providing the requested information, Justice Ramson, referring to me as Comrade, stated that an applicant “ought not to arrogate to himself the liberty of any ad hominem criticism of his statutory benefactor.”

Bizarre

This extraordinary and bizarre statement reveals a fundamental misunderstanding of the role of public bodies – not as benefactors bestowing favours but as public servants charged with statutory duties. The letter further suggested that I should have found the information in “the Bar Review contemporaneous with its delivery” or in the Commissioner’s own published work, his “3rd Book, Metrics of Bar and Further access thereto.” Such an absurd evasion directly undermines the very purpose of the Access to Information Act. To date, I have still not received the information, suggesting that the Commissioner’s assurance that “appropriate action will be taken to accommodate your non-timeous request” was not serious.

Perhaps most troubling is the phantom-like nature of the Commissioner’s office itself. Although officially under the Office of the President, that office could not provide information on the location of the Commission of Information. When even the President’s Office cannot direct citizens to a statutorily created office, one must question how seriously the Act and the broader issue of transparency are taken. But that is not all.

The Commission’s financial aspects are equally concerning. Tens of millions of dollars are allocated annually in the national budget for the Office of the Commissioner, yet no financial accounting for these funds has ever been provided. The Access to Information Act requires the responsible Minister to table an annual report on the operation of the Act. The parliamentary records do not disclose even a single report having been submitted to Parliament since the Act’s inception.

Implications

The implications for oil and gas governance are profound. When citizens and civil society organizations like OGGN cannot access basic information about tax payments, production figures, or environmental compliance, confidence in the management of the national patrimony and accountability is severely eroded – especially in the absence of an independent Petroleum Commission.

What makes this situation particularly troubling is that the Access to Information Act was introduced with great fanfare and is still marketed as a pillar of governmental transparency. Yet in practice, it has become a barrier rather than a conduit for information flow. The Commissioner actively undermines transparency, using unnecessarily complex language that obfuscates rather than elucidates.

These issues – obfuscatory language, failure to provide requested information, inability to locate the physical office, and non-compliance with statutory reporting requirements – are unacceptable in a democratic society. Indeed, it is fair to say that the Office of the Commissioner of Information has become an embarrassment to both the Government and the country. Measured by value for money, the Office of the Commissioner of Information is zero out of one thousand!

Conclusion

The Act’s poor performance and operations vindicate the criticisms made by the national transparency body TIGI and others when it was first introduced. On the few occasions that it does meet, the National Assembly can find the time to pass some gravely inconsequential amendment Acts. Meanwhile, a law meant to guarantee transparency has been perverted into a mechanism of secrecy. This farce must end.

Parliament must immediately demand an accounting of the Commissioner’s budget and require compliance with the Act’s reporting obligations. If the Commissioner’s Office continues obstructing access to information, drastic, surgical measures must be taken. The government cannot claim to champion transparency while allowing this mockery to continue.