Transparency group ups call for release of ExxonMobil contract

-says will help to even odds stacked against Guyana

Transparency group, TIGI, yesterday piled pressure on the government to release the 1999 contract with ExxonMobil to prospect for oil arguing that it would help to even the odds stacked against this country in pending negotiations.

In a statement entitled `The imperative of disclosure of the contract with ExxonMobil’, Transparency Institute Guyana Inc (TIGI) said: “We believe that Exxon, the major player, has a reputation to protect and would shun corrupt transactions. While we hope this is true, corruption is not the only problem Guyana has to worry about when dealing with oil companies. One of these is the ability of a small country like Guyana to negotiate with a titan like Exxon. Most of the cards the government is keeping to its chest are stacked in Exxon’s favour. Exxon is a descendant of the company that invented the oil industry and a key player and superpower in this global sector. Exxon will have more information – a vital element of negotiation – than the Guyana officials will ever dream exists.

“An indispensable approach to evening the odds that are stacked against Guyana in the negotiations is to publish the contract drafts and make the negotiations accountable to Parliament. In this way, Guyanese of the diaspora whose knowledge is vast in this area will be able to make contributions to the process and thus protect our country’s interest”, the watchdog group said.

It argued that Guyanese have a special interest in developments regarding the discovery of substantial amounts of petroleum in Guyana.

“We agree that the potential certainly exists for catapulting Guyana into a new sphere of economic growth. This not only provides an unprecedented opportunity for engaging all our human resources in guarding of our patrimony, but in fact demands that they be so engaged. This should be considered in the context of the worldwide recognition that especially in developing and transition countries, the emergence of substantial amounts of petroleum is associated with substantial increases in the level of corruption”, TIGI warned.

It pointed out that for sometime now, there has been a growing call for disclosure of the contract with ExxonMobil and its partners.

“Each time this chorus strikes up, there is a refrain from the government citing reasons why it is best not to disclose. One reason advanced is that full disclosure would not be to the national benefit or the national interest. In fact, the Minister of Natural Resources was quoted as having said that `... We have no reason right now to expose all our business to the world’”, TIGI noted.

TIGI said that Google searches for “contract secrecy” and “transparency in government contracts” would lead to thousands of articles with the vast majority disagreeing with non-disclosure.

“This abundance of information supporting the position of abhorring contract secrecy is not a coincidence. It is the result of a mounting realization worldwide that contract secrecy is injurious to countries owning the resources, as the following examples contend”, TIGI posited.

It noted that the founder of Transparency International, Peter Eigen is quoted in the UK Guardian (https://www.theguardian.c om/global-development/ 2012/oct/26/world-bankcontracts-online-transparency) as saying that “… although companies have the right to secrecy when contracting with each other, ‘different rules have to apply’ when a government is party to a contract” and that “confidentiality clauses are often overprotective and ‘sloppily written’, and must be subject to scrutiny.”

TIGI said that another explanation being given for non-disclosure has to do with “national security,” but said it was not convinced.

“First of all, it is near impossible to undervalue the amount of the oil potential that has already been disclosed to the public, by the international press and in investment circles. Secondly, Venezuela has already played its hand in furtherance of its claim to Guyanese patrimony; it is claiming the entire seaway far beyond its original claim to Essequibo. The amount of information about this oil discovery that can excite the avarice of neighbours is already publicly available”, TIGI said.

It cautioned that a security risk may also stem from physical presence in the oil exploration zone as experienced when Suriname moved against the CGX operations in 2000. However, it noted that ExxonMobil is currently operating in the Stabroek Block which is not in an area of dispute.

“The link between release of the contract and security risk is tenuous and this calls into question the true motivation for secrecy”, TIGI posited.

It said that the government’s willingness to shun the large amount of evidence against contract secrecy and the potential ills associated with a developing oil industry is baffling, particularly given its stated commitment to transparency and accountability.

“We call for a full

release of the contract with ExxonMobil and its partners”, TIGI asserted.

TIGI also said it has noticed that there might be a serious obstacle to disclosure embedded in the governing law. It said that the Petroleum Exploration and Production Act - Cap 65:10 seems to provide a built-in secrecy clause. Part II, S4 (http://goinvest.gov.gy/wpcontent/uploads/Petroleum-Explorationand-Production-cap6510-.pdf) provides as follows:

4. (1) Subject to subsection (2), no information furnished, or information in a report submitted, pursuant to this Act by a licensee shall be disclosed to any person who is not a Minister, a public officer or an employee of the Guyana Geology and Mines Commission except with the consent of the licensee.

(3) Where a licensee is a party to a petroleum agreement the right of the licensee, his servants or agents to disclose information about prospecting or production operations under the licence shall be subject to any restrictions or limitations in that respect specified in the agreement.

(4) Any person who discloses information in contravention of this section shall, on summary conviction, be liable to a fine of seventy-five thousand dollars and imprisonment for three years.

TIGI said that this clause was inserted in 1997 and its application would mean that (a) all the information released to the public is what the oil companies now talking to the government want released.

“We are not clear on whether this applies to the contract and hereby specifically ask this of the GOG. If it does, this would mean that the minister and the leader of the opposition have not been dealing with the Guyanese public in good faith since they would have known full well that they would be breaking the law by disclosing anything else but never cited the law as a reason. In that case, we will also be concerned about the very existence of this confidentiality clause and would want to know whether we can expect to see it removed in the revised act which is due shortly”, TIGI said.