Natural Resources Fund Act unacceptable - Bharrat
-to be repealed or amended early next year
The PPP/C will not accept the Natural Resources Fund (NRF) Act in its current form and will either repeal or amend it sometime early next year, Minister of Natural Resources Vickram Bharat has said.
“We have to repeal or amend it but we haven’t gotten down to details as to what it would be as yet because we are focusing now on local content and want to push that out and then start focusing on NRF and the Petroleum Commission Bill,” Bharrat told Stabroek News when contacted for an update.
“We are taking everything in stages but by early next year we will focus on it to see it enacted,” he added.
Attorney General Anil Nandlall had told this newspaper that the law was completed under the APNU+ AFC administration and was with the Chief Parliamentary Counsel for review, along with other legislation.
“What I instructed the Parliamentary Counsel to do is to send those bills back to the new subject ministers with an instruction that they examine the bills and they confirm or not confirm that they are in consonance with the current administration’s policy directives on each of the bills. The NRF Act was sent to Minister Vickram Bharrat with a note to that effect,” he explained while adding that it was being examined by the Ministry of Natural Resources.
As to how quickly it would return to the AG’s office, Nandlall said it “would depend on the proposed amendments it comes back with.”
But he emphasised that “the establishment of this Fund is a priority of this government as explained during its elections campaign”.
“All things being equal, once it comes back from the minister, every effort will be expended to expedite its passage and enactment,” he added.
Around US$150m in oil revenue has already accrued to Guyana and should be credited to the fund. The monies are with the New York Federal Reserve Bank. The Act cannot be activated until the various committees are constituted.
The Natural Resource Fund (NRF) Bill, No. 14 of 2018, was tabled in Parliament on November 15, 2018. In the political limbo following the successful December 21st 2018 no-confidence vote against the former government, the controversial bill was passed without the opposition side of the House being present. It was subsequently assented
to by then president David Granger in January of 2019.
The law provides for the establishment of a Natural Resource Fund to manage natural resource wealth in an effective and efficient manner by ( a) ensuring that volatility in natural resource revenues does not lead to volatile public spending; (b) ensuring the revenues do not lead to a loss of economic competitiveness; (c) fairly transferring the wealth across generations to ensure that future generations benefit from it; and (d) using the wealth to finance national development priorities, including green economy initiatives.
Section 3(3) states that the NRF shall be a public fund to be held in the name of the Bank of Guyana on behalf of the government and the people. Section 4 specifically caters for the NRF to be “managed according to the principles of good governance, including transparency and accountability, and international best practices, including the Santiago Principles.”
According to Part IV of the bill, the minister shall be responsible for the “overall” management of the fund as well as the preparation of the Investment Mandate and in doing so will seek the advice of the Investment Committee, be assisted by the Senior Investment Advisor and Analyst and enter into an operational agreement with the Bank for the operational management of the fund.
While the PPP/C objected to the passage of the bill, the APNU+AFC government went ahead last year July with the process
to nominate committee members for the management of the Fund and invited the then opposition to participate.
Then PPP/ C parliamentarian Juan Edghill, who now serves as Minister of Works, had written to the former government and informed it that with the passage of the no- confidence motion, which required the holding of elections, the APNU+AFC administration as a “caretaker” or “interim government” had lost the mandate to pursue such actions.
“There can be no appointment of members of either the Macroeconomic Committee or the Investment Committee. As such, there will be no nominations from the Leader of the Opposition…It is our hope that your government and you will comply with the Constitution and adhere to the rulings of the CCJ, in all matters,” Edghill added.
Still unmoved, APNU+ AFC moved ahead even further and in December of last year and signed a pact with the Bank of Guyana, bringing the operationalization of the NRF close. It hailed the move as demonstrative of its transparency in the management of the oil and gas sector.
The MoU set forth the obligations of the BoG as the operational manager of the NRF, which include: 1) receiving and accounting for all deposits into the NRF; 2) investing the NRF in eligible asset classes; 3) appointing private managers and custodians; 4) reporting on the performance of the NRF on a monthly, quarterly and annual basis; 5) implementing management systems, procedures and risk management arrangements in accordance with international standards; and, 6) providing the public with information on the NRF as required by law; among others.
It is unclear what aspects of the legislation will be kept but Bharrat said that the focus for now is not on the NRF but seeing through that local content provisions are in place so that Guyanese are tangibly able to benefit from the oil and gas sector.