Natural Resource Fund Law(NRF)…Jagdeo to remove committee which oversees sustainable withdrawals from oil account

– Jagdeo to remove committee which oversees sustainable withdrawals from oil account
– Says arrangement complex, not transparent

By Kaieteur News

GEORGETOWN
Petroleumworld 12 13 2021

The current Natural Resource Fund (NRF) legislation recommends that a five-member Macroeconomic Committee be established to oversee and provide suggestions on withdrawals from the account. The arrangement however, does not find favour with the PPP/C government. The administration believes it is utterly flawed for compliance with transparency and accountability.

On this premise, Vice President, Dr. Bharrat Jagdeo recently disclosed that the amended law which will be tabled on Thursday will not contain this feature.

He said, “…In opposition, we had said the Minister of Finance was too directly involved in the management of the Fund and had too much of an influence in the legislation so we will insert a Board that will sit between the minister and the management of the Fund.”

The Vice President added, “But then there is a complex macroeconomic committee that reports to the minister and calculates the economically sustainable sum that can be withdrawn and there is no transparency on how this sum is being calculated.”

The local oil czar also flagged provisions of the law which reposes in the Minister the power to appoint members of the committee.

The current legislation says the Macroeconomic Committee shall consist of the following five members appointed by the Minister: a representative of the Ministry who shall be the Chairperson of the Macroeconomic Committee, a nominee of the Leader of the Opposition, a representative of the Bank nominated by the Governor of the Bank, a nominee of the Private Sector Commission and a leading international expert in macroeconomics identified and approved by Cabinet.

It notes that all members of the Macroeconomic Committee shall be persons with at least 10 years of experience of applied macroeconomics and shall hold a minimum of a master’s degree in economics or a related field from a reputable university.

The law also states that the Minister can terminate the appointment of any member of the Macroeconomic Committee who contravenes the provisions of the Act.

Jagdeo further noted that the Minister also has the leverage to determine on his own, what the fiscally sustainable amount for withdrawal could be.

Noting that the foregoing goes against the grain of transparency and accountability, Jagdeo said the government has taken the decision to have it replaced with “a simple and clear formula that the citizens can understand. It will not be complex, it will stay below this sum on an annual basis the money comes directly to the Treasury…and larger shares will be saved for future.”

He assured that the new and improved formula will be very simple for citizens to understand and will cater for public disclosure.

On Saturday, Kaieteur News had reported on another committee Jagdeo said would not be part of the amended legislation. He said the new law will no longer have a 22-member Public Accountability and Oversight Committee while adding, “…it is almost impossible to get anything done with 22 different organisations having oversight responsibility.”

Kaieteur News had reported in 2018 when the NRF Bill was first tabled that it had paved the way for the creation of the “Public Accountability and Oversight Committee” which was tasked with providing the nation with independent assessments on the management of the Fund and the utilisation for withdrawals from the Fund.

It is also responsible for monitoring and evaluating the compliance of the government and other relevant persons when it comes to the principles of transparency, good governance and international best practices, including the Santiago Principles, when using the Natural Resource Fund.

The Committee, according to the existing law, was expected to include a representative from civil society organisations and community based organisations, a nominee to represent women with the nominee being nominated by civil society organizations; a nominee of the Bar Association of Guyana, a representative of the Guyana Consumer’s Association, a nominee of the Guyana Extractive Industries Transparency Initiative (EITI), a nominee of Transparency International Guyana Inc. (TIGI), a nominee of the Guyana Press Association, a nominee of most representative associations of trade unions; a nominee of the Private Sector Commission, one from each of the 10 Regional Democratic Councils and a nominee from academia who is nominated by the governing council of the University of Guyana.

Additionally, the former Government had paved the way for the Committee to have financial resources to carry out its functions. It was also expected to publish bi-annual reports of its activities on its website and that of Parliament’s.

While Jagdeo did not say if the amended law would feature any mechanism for oversight from civil society groups, it is crucial to note that Ghana, which Guyana is currently consulting on its legislative framework, has a similar arrangement in place for the oversight of oil money saved and expended by the government.

In 2011, the Parliament of Ghana had passed the Petroleum Revenue Management Act, which included the establishment of the Public Interest and Accountability Committee (PIAC). The 13 civil society members of the committee—which includes representatives of the unions, traditional chiefs, journalists, lawyers, chartered accountants and religious groups, who are appointed by the Minister of Finance for two to three year secure terms—are mandated to: Monitor and evaluate compliance with the Petroleum Revenue Management Act; Provide a platform for public debate on whether petroleum revenues are being used to advance development priorities; and Provide an independent assessment of the management and use of petroleum revenues.

The PIAC represents the only legislated petroleum revenue management oversight body in Ghana, consisting entirely of civil society members and therefore completely independent. Since its establishment, the Committee has been successful in holding the Government of Ghana accountable on how it spends and saves the citizens’ oil money. It has also been instrumental in recommending several areas for improvement, many of which to date are at various stages of implementation.

______________

By Kaieteur News

kaieteurnewsonline.com / 12  12 2021

Copyright© 1999-2021 Petroleumworld or respective author or news agency. All rights reserved.

We welcome the use of Petroleumworld™ (PW) stories by anyone provided it mentions Petroleumworld.com as the source.

Other stories you have to get authorization by its authors. Internet web links to http://www.petroleumworld.com are appreciated.

Petroleumworld welcomes your feedback and comments, share your thoughts on this article, your feedback is important to us!