Policy Forum group refutes mining rep’s claims of intrusion by transparency initiative

With the withdrawal of the Guyana Gold and Diamond Miners Association (GGDMA) from the MultiStakeholder Group (MSG) that manages the Guyana Extractive industries Transparency Initiative (GYEITI), local non-governmental organisation Policy Forum Guyana (PFG) has challenged the claim that miners were targeted and harassed to make disclosures.

In response to claims made by a GGDMA official, who spoke with Stabroek News on the withdrawal, the PFG in a release on Monday sought to clear the air on what took place.

The PSG noted that contrary to the impression given, GGDMA is not represented on the MSG. Instead, the mining association was invited by the Minister of Natural Resources when the GYEITI was being formed in 2016 to facilitate the election of a group to represent the interests of small- and medium-scale miners. It was pointed out that once the MSG is officially inaugurated, the participants are there in an individual capacity. Further, the same applies to the role played by PFG for the civic component of the MSG. It was also explained that GYEITI is the Guyanese section of EITI whose members serve in a voluntary capacity and has a small Secretariat that coordinates the work of the MSG.

According to the release, the member elected from the GGDMA representing all medium and small-scale miners, “spent more energy reminding the sector that participation of gold companies in the EITI process is voluntary, not mandatory” instead of utilising the platform to educate the sector about the advantages of EITI. While the assertion that GGDMA’s participation was “voluntary” was acknowledged by PFG to be true, the NGO suggested that the association’s representative “seems to have overlooked” to inform miners that the government, once committed to the EITI process, must reveal what it received from each company invited to report, regardless of whether the company cooperates. “This distorted information resulted in much consternation among the companies who declined the invitation when the first GYEITI report revealed information from all the companies invited.”

PFG also challenged the GGDMA official’s assertion that the GYEITI engages in tracking down “all these small miners harassing them ‘to produce this and explain that.’” On the contrary, it stated that the only companies looked at by the independent international auditors contracted to compile the Report were those who had paid $75 million or more to the Government of Guyana for the year 2017, or over $60 million in 2018, in the form of licensing fees, royalties, and other forms of taxation. It was disclosed that in 2017 these entities numbered 28, including some who were buyers rather than producers. The rationale for this selection, it explained, was to focus on the large entities that collectively provided approximately 95 per cent of all revenue in the industry, rather than pursuing the rest of 19,000-odd workers in the sector to find the remaining 5 per cent. “The vast majority of the small- and mediumscale miners were not affected at all by EITI procedures.”

Therefore, as PFG sees it, the GGDMA’s attempt to project the GYEITI as waging war on small- and medium-scale miners “serves to distract from the more relevant question of how companies who pay more than $75 million in taxes can be considered ‘small and mediumscale’.” As a matter of fact, what is more pertinent here, PFG claims, is GYEITI drawing attention to this matter.

As the release explains: “The term ‘medium-scale’ disguises a widespread abuse in the industry whereby miners own licenses covering acreage far in excess of the 1,200 acres which defines the difference between ‘large’ and ‘medium-scale’ mining. By dividing a large area of land into a multiplicity of licenses, the license owner escapes paying the license fees that large-scale mining attracts.” In addition, this

claim is supported by the figures in the 2017 GYEITI Report which illustrates how widely this abuse is practiced and the concomitant losses of millions in hard currency to the Government and country.

And in an effort to add more detail to this damning claim, PFG pointed to the evidence from the 2017 Report which shows that the largest miner held 228,339 acres divided up into 233 medium-scale permits, much of it contiguous lands, of less than 1,200 acres. The EITI Report figures indicate some 329 ‘medium-scale’ operators engaged in this practice in 2017, the ten largest holding 1,013 million acres under 1,029 medium-scale licences. “By way of comparison, this is almost the size of the island of Trinidad (1,268 million acres).”

According to the release, “The systematic registering of large-scale holdings as a multiplicity of smaller holding aims to avoid the higher fee that large scale licenses attract over medium-scale. The loss on each license is the equivalent of USD2.00 per acre per annum which is to be multiplied by the 2,690,552 acres operated by the 329 noted above. This figure should then be multiplied by the decades in which it has been practiced, in order to find the true amount defrauded from the people of Guyana.”

With regard to GGDMA’s claim that the EITI is ’intrusive’, the release stated that such a claim suggests that disposing of Guyana’s publicly-owned natural assets, by private companies at a considerable loss to the State is no one’s business but their own.

It is not EITI’s role or function, PFG asserted, to pass judgement on the information the process reveals, much less to correct it. Instead, it said the EITI’s only function is to provide transparency about what governments claim to receive and companies claim to pay and between regulations and actual practices. “Joining the dots and drawing conclusions remains the responsibility of Guyanese society as a whole.”

In conclusion, the PFG suggested that the current impasse with the gold sector could be broken by the inauguration of the new MSG by the Ministry of Natural Resources.

As an implementing EITI country, Guyana is preparing for its 3rd EITI validation process scheduled to begin on October 1 of this year. The government is required to commit to working with civil society and companies, and establish the MSG to oversee the implementation of the EITI.

PFG is a network of civic organizations that came into existence in 2015 with the general aim of strengthening electoral, environmental, and financial accountability. Membership of the PFG currently comprises some 22 organisations covering trade unions, indigenous women, youth, transparency, and faith-based organizations active in Guyana.