Gaskin against Guyana becoming EITI complaint country

– says only Auditor-General should balance the books

By Samuel Sukhnandan

Local economist and outspoken political commentator Ramon Gaskin is questioning the rationale behind Guyana becoming an EITI-complaint country (a member of the Extractive Industries Transparency Initiative).
He says it does not serve any significant purpose, but only gives developed countries access to sensitive financial information concerning Guyana.
Although many Third World countries join because they are concerned about their reputation with international donors and expect to be rewarded by increased aid, Gaskin says there is no real benefit in joining the EITI; rather, it opens up Guyana to being heavily reliant.
Quantitative analysis has demonstrated that countries do gain access to increased aid the further they progress through the EITI implementation process, but Gaskin still thinks Guyana should be able to balance its own books, and determination in regard to Guyana’s financial status should be made by the Auditor General.
“The people funding the EITI are the big oil companies, and they are supported by the International Monetary Fund and the World Bank, which like to tell Third World countries how to run their business,” Gaskin expressed, whilst contending that Guyana should not fall prey to what he describes as a ‘trap.’
Joining the EITI has proven popular, with several countries (48 Third World and four developed nations) having already so done. But Gaskin argues that, as a soft law standard to which countries voluntarily commit, EITI presents a paradox.
“Why would corrupt governments voluntarily expose themselves to sunlight? Does its popularity imply that it is meaningless?” he asked.
EITI’s aim is to promote development through transparency. It sets a uniform global standard for governments to publicly report the revenues that are generated from the extraction of natural resources, such as petroleum. Countries that agree to the standard commit to forming a multi-stakeholder group of government, business and civil society officials who oversee the public reporting process. That process has already started in Guyana, and is now approaching finalisation.
Unlike mandatory disclosure laws that require companies to independently report their payments to governments, EITI promotes a dialogue among a range of stakeholders in extractive industries. The report, a detailed docket of tax revenues, royalties and licensing fees, is also a valuable resource to inform the public of the country’s natural resource wealth.
Gaskin has dubbed the idea of Guyana becoming EITI-compliant “nonsense.” He posits that the amount of money the Guyana Treasury would get from the oil sector has to be audited by the Auditor-General. “He is the person who has to check that we are getting the correct amount of money from the contract. We don’t have to report to people outside (of Guyana) what we are getting; we have to report to the Auditor- General.
“I don’t know what part of our laws allows people from outside to come and check our books; and I don’t see what the benefit is,” he argues.
The economist has said that if Guyana is so ready and willing to join the EITI, under no circumstance should Government continue to withhold information in regard to the contract struck with ExxonMobil. That information should be made public, and the contract should, by all means, be laid in the National Assembly to enable lawmakers to have an understanding of what is contained therein.
In many countries, most of the revenues from natural resources accruing at subnational levels are not derived from company payments to local government entities, but from transfers from the central government. Depending on the revenue-distribution frameworks in place, these transfers can be considerably larger sources of revenue for subnational entities than taxes and fees collected at local levels.
The revised EITI Standard requires that such transfers be reported, where mandated by law and where material.
Where companies are legally or contractually required to make social contributions, these must be disclosed, under EITI standards.
Where countries collect significant revenues from the transportation of oil, gas and minerals, such as pipelines, the Government will also be required to disclose the revenues received.
The requirement to publish annual activity reports is not limited to compliant countries, the EITI has said. It is foreseen that countries will report on progress with meeting the EITI requirements as well as (on) efforts to achieve the objectives set out in their work plans.
Validation is procured and managed by the EITI’s International Secretariat, rather than by implementing countries. Countries undertake validation more frequently, with compliant countries being revalidated every three years, as opposed to every five years under the old rules.