The Government of Guyana has said that it is attempting to improve the level of transparency and accountability in the extractive industries, particularly in mining by eventually adopting the global Extractive Industries Transparency Initiative (EITI) that involves the disclosure of payments to the government from private companies, and the disclosure of receipts from the government.
A release from the Ministry of Natural Resources and the Environment (MNRE) said that this undertaking was being advanced through the hiring of a consultancy team to conduct a scoping study on the adoption of the global Extractive Industries Transparency Initiative in Guyana. On December 3, the ministry began advertising for the consultancy in both local and international media, as well as on the E-procurement website.
The ministry said that the extractive industries are an important source of employment, income and government revenue in the primarily resource-based Guyanese economy. This is due to the availability of mining properties, increased production and technological improvements and attractive commodity prices. It said that with further hydrocarbon exploration, the resumption of manganese mining, increased production of bauxite and gold and the opening of new exploration, the extractive sector is expected to continue growing rapidly.
According to the release, the Extractive Industries Transparency Initiative is a global standard aimed at improving revenue transparency and accountability in the extractives sector. The EITI, established in 2002, has since become a robust yet flexible methodology for monitoring and reconciling company payments and government revenues from oil, gas and mining at the country level.
It said that the implementation of the EITI standard has two main components: i) the disclosure of payments to the government from private companies, and the disclosure of receipts from the government, by means of an Annual Report, and ii) the constitution of a multi-stakeholder group including representatives from the government, private sector and civil society who would be responsible for overseeing the process and disseminate the findings of the EITI Report.
The release stated that the benefits of seeking to implement the EITI include an improved investment climate by providing a clear signal to investors and international financial institutions that the government is committed to greater transparency. The EITI would also assist in strengthening accountability and good governance, as well as promoting greater economic and political stability.
It said that the MNRE had re-engaged the EITI International Secretariat to implement the initiative in Guyana by the signing of a Memorandum of Understanding in May 2012 to assist with Guyana’s preparation for the consideration of EITI candidacy. The MNRE has since then participated in several EITI conferences and workshops in an effort to build local capacity in understanding the EITI processes.
Last February, the MNRE had formally established a Multi-Stakeholder Group (MSG) to deliberate on a potential candidacy to the EITI. To meet the EITI standard, the MSG is responsible for identifying the goals to be achieved through EITI compliance as well as implementing the actions necessary to realise those targets. The formation of the group is a critical step for countries intending to implement the EITI.
The Inter-American Development Bank and the World Bank are providing technical advice to the government in its efforts towards EITI candidacy, as part of their commitment to exploring the implementation of the EITI in countries in the Latin America and the Caribbean region.
In addition, the EITI Secretariat has provided guidance on the content of both the “feasibility” and “scoping” studies necessary for taking forward the initiatives. The former is to identify and assess the challenges and opportunities of EITI implementation while the latter will determine the scope of EITI reporting.
The release said that the advertised consultancy will produce a study which will inform the MSG’s discussions regarding the scope and implications of the implementation of the 2013 EITI standard for Guyana’s extractive industries (oil, gas, large and small-scale mining).
The consultants’ assignment will consist of two parts i) A detailed study to assess Guyana’s extractives industry and to highlight opportunities and challenges of EITI implementation, including a cost/benefit analysis; and ii) Dissemination of the results and capacity building for staff.
According to the release, the Minister of Natural Resources and the Environment, “Robert M Persaud has underlined the importance of transparency by this government and companies in the extractive industries and the need to enhance public financial management and accountability. Thus, the achievement of greater transparency must be set in the context of respect for contracts and laws which will enhance the environment for domestic and foreign direct investment that financial transparency may bring.”
“As such, the Ministry of Natural Resources and the Environment believes in the principle and practice of accountability by and to all citizens for the stewardship of revenue streams and public expenditure. Hence, we are committed to encouraging high standards of transparency and accountability of government operations through the contributions of stakeholders, including the Government and their agencies, extractive industry companies, service companies, multilateral organisations, financial organisations, investors, and non-governmental organisations,” the release added.
The press release came days before over a controversy erupted over what the minister should have told the natural resources committee of Parliament about Muri Brasil Ventures and its survey in south east Guyana.
