After months of denial, the Ministers of Natural Resources and Finance admitted that the Government of Guyana did in fact receive a bonus last year when they signed a Production Sharing Agreement (PSA) contract with ExxonMobil. The confession came during the 2018 Budget debate, when a “smoking gun” in the form of the Finance Ministry’s instruction to the Bank of Guyana, (BoG) dated Sept 20, 2016 and headed: “Signing bonus granted by ExxonMobil – Request to open bank account”, was unearthed.
At the end of October of this year, social activist and accountant/lawyer Chris Ram revealed the existence of the bonus, which the two aforesaid ministers consistently denied in carefully parsed language. Opposition Leader Bharrat Jagdeo and a wide cross-section of civil society immediately demanded that Government acknowledge the Bonus and disclose its whereabouts, since it had not been placed in the Consolidated Fund, as was later confirmed during the Budget debate.
The Government’s spokespersons, as well as the subject ministers, adamantly maintained their denials.
While there has been some debate as to the comparative benefits between signing bonuses and opting for a greater share in profits, the former are fairly standard in the petroleum industry. Thus the facticity of the bonus in and of itself is not an issue, but the secrecy on the matter is, especially when, from the onset of oil discovery in 2015, there has been an emphasis on, and commitment to, “transparency” by all concerned parties, including the Government. In fact, the Government gave great publicity to its successful efforts to join the Extractive Industries Transparency Initiative (EITI).
Since the EITI demands: “…countries participating in the EITI, companies are required to publish what they pay to Governments and Governments are required to publish what they receive from companies”, one wonders what will be the action of the body on Guyana’s membership, since the Bonus payment was not mentioned in the latter’s application for membership. The application was made in August of this year — a year after Guyana received the Bonus and secreted it in the BoG – and was approved in October. There is now incontrovertible evidence that Guyana entered the body on false pretences.
The EITI’s response is very critical at this juncture, since there has always been great skepticism about Guyana’s ability, and even willingness, to maintain transparency because of the disequilibrium of size and resources between the Government of Guyana and ExxonMobil. This issue was raised when Minister Trotman took a large team on an all-expenses-paid trip to Exxon’s headquarters in Texas to ostensibly discuss “policy” matters.
The Bonus is now being described by Minister Trotman as a payment by Exxon to cover “legal fees” that are being incurred to prepare Guyana’s case to the ICJ when the UN Secretary General sends the Venezuela Border Controversy to that institution by Dec 31, as promised, for resolution. But the Finance Minister has no authority to create any such fund under the laws of Guyana. Trotman was not negotiating on behalf of a private entity, such as NICIL, which can retain funds until it decides to transfer them into the Consolidated Fund, but for the GoG.
They committed illegalities, in the first instance, to create the Fund; and subsequently, to deny the existence of the latter. For the Ministers to split hairs and accuse interlocutors of not asking them questions specific to the quantum of the bonus is beyond surreal, when the entire transaction was shrouded in secrecy. This secrecy was totally unwarranted, and Trotman and Jordan cannot escape by wrapping themselves in the flag of patriotism. It has indeed been truly said that “patriotism is the last refuge of scoundrels”.
A “signing bonus”, as pointed out, is very common in oil production, and is classified as “Government revenues”, which are fungible. There was nothing Venezuela could do if it had been revealed that Guyana was using its revenues to prepare its legal case on the border controversy, and not to do so would have been very imprudent.
The Government has to be held accountable for this deception.
