In 2014, Cabinet appointed the Chief Executive Officer of the Guyana National Industrial Company Inc. as chairman of the Guyana Geology and Mines Commission (GGMC). I had congratulated him on his appointment and offered to provide any advice on financial matters that he might wish to seek of me. Although Mr. Williams acknowledged that he would need such advice from time to 
time, regrettably, he never saw it fit to do so. Then there was the $3 billion loan fiasco involving the GGMC and the Ministry of Housing, which was the subject of two separate articles from me. Having carefully examined the GGMC Act, I had concluded that it was not within the authority of the Commission to grant such a loan since the Act only permits such an action in the furtherance of mining activities, the core mandate of the GGMC. In the light of the public furore on the matter, the GGMC sought a legal opinion which opinion was consistent with my conclusion. The Court has also pronounced in a similar vein.
In recent days, allegations of extravagance in relation to entertainment expenses and of impropriety in the granting of mining permits have been levelled against the Chairman. Today, we examine these allegations, the response from the GGMC and my own thoughts on these two matters.
Remuneration for members of the GGMC
The Schedule to the GGMC Act provides for the remuneration of members of the Commission, as determined by the Minister, as follows:
The Commission shall pay to each of its
members (other than the Minister or the
Commissioner) in respect of his office such
remuneration and allowances, if any, as the
Minister may determine, and to the Chairman
(if he is not the Minister) and the Deputy
Chairman, in respect of his office such
remuneration and allowances, if any, (in
addition to any remuneration and allowances to
which he may be entitled in respect of his office
as a member) as may be so determined.
We do not know what remuneration and allowances of the members of the GGMC’s Board are nor do we know whether these were approved by the Minister. We do, however, know that the Chairman incurred entertainment expenses totalling $4 million during an 18-month period ended July 2015. The specific details of the expenditure incurred are also not known, including the persons/organisations entertained as well as the justification of the choice of the venues – the Silhouette Bar in Kitty, 704 Sports Bar in Albert and Lamaha Streets and Brazil Churrascari and Pizzaria in Alexander Street, Lacytown – none of which appear to be suitable for having lunch or dinner with business associates.
Response from the GGMC
GGMC indicated that the Board approved of entertainment expense accounts for the Chairman as well as the Commissioner and the two Deputy Commissioners. It argued that this was considered necessary since the senior officers of the Commission often times engaged in activities on behalf of the Commission and therefore “it was deemed prudent for the Commission to fund these engagements rather than the expenses being borne personally…These engagements were in the form of dinners and other social events and were for external and internal stakeholders of the sector, inclusive of management of the Commis-sion and not necessarily for personal engagements.” GGMC also contended that it would be placing the senior officers of the Commission “in a difficult moral and conflict of interest position, if such engagements were funded by current and potential stakeholders of the Commission”.
Analysis of GGMC’s response
GGMC’s response did not indicate whether a cap has been place on the entertainment expenses of the Chairman and the other officials involved, as is the normal business practice. That apart, if there has been no ministerial endorsement, then the Board’s approval of the entertainment expense account for the Chairman constitutes a violation of the Act, notwithstanding the GGMC’s attempt at justification of the Board’s action. In addition, it is not within the authority for the Board to approve of the compensation package of its members since such a practice will pose a conflict of interest. It is for this reason that the Act vests that responsibility with the Minister. Assuming that the Minister has approved of an allowance for entertainment (which I doubt has happened, judging from what is payable to members of other boards), if a member spends beyond the allowance granted, he/she has to meet the difference out of his own personal resources. There are no expense accounts involved.
The sister agency, the Guyana Forestry Commission (GFC) of which Mr. Williams was also Chairman during the period June 2012 to December 2013, pays its Chairman $15,000 per meeting of the Board and $10,000 to a Board member. There are no allowances or expense accounts. A similar arrangement pertains to the Bank of Guyana which pays a Board fee of $7,500 per meeting. Mr. Ramon Gaskin outlined a similar arrangement in relation to the Guyana Power and Light of which he was Chairman.
Statutory bodies, such as the GGMC and the GFC, act an agents of the State, and to the extent that they experience financial difficulties, it is the State that has to bail them out. It follows that such agencies have to exercise extreme caution in incurring expenditure so as to avoid being perceived as indulging in acts of extravagance. Indeed, statutory bodies render essential services of the State, are non-profit in orientation, and there is a need to avoid replicating the practices of the private sector in relation to certain types of expenditure.
Importantly, it is not normal for Board members to regularly interface with an organisation’s clients (actual and potential), especially in a social setting since such interactions can present particular difficulties when the Board has to make decisions in relation to those clients. If found necessary, such interactions would be a function of the management of the organisation which is accountable to the Board. If Board members step down from their oversight role and get involved in operational matters, an important element of checks and balances is lost. Indeed, the Board has to function as a neutral party, removed from situations of undue influence, so as to enable it to render decisions that are consistent, objective and in the best interest of the organisation.
Conflict of interest
A conflict of interest occurs in a situation where a public official’s decisions are influenced by his/her personal interest. It has the potential to undermine the impartiality and objectivity of a person because of the possibility of a clash between the person’s self-interest and his/her professional or public interest. Where an individual or organization is involved in multiple interests, one could influence the action of another, hence the potential for a conflict of interest.
The recently released draft Code of Conduct for politicians and senior public officials states that “Ministers, Members of Parliament and Public Office Holders should avoid using their official position to transmit any information made available to them in the course of their official duties to benefit themselves, their relations or any other individuals with whom they are associated. They should avoid compromising themselves or their office, which may lead to an actual or perceived conflict of interest. The failure to avoid or declare any conflict of interest may give rise to criticism of favouritism, abuse of authority or even allegations of corruption…”
According to the Schedule to the GGMC Act, any member of the Board whose interest, whether directly or indirectly, is affected by a decision of the Commission on any matter whatsoever, shall disclose the nature of the interest at the first meeting of the Commission at which he/she is present after the relevant facts have come to his/her attention. Such disclosure shall be recorded in the minutes of the meeting, and the concerned member is prohibited from participating in the meeting during the deliberations or from voting on the matter, unless the Board decides otherwise.
The Chairman is reported to have benefitted, via an Irrevocable Power of Attorney (POA), from eight blocks of mining lands granted to Mr. Ivor English. The permits were issued to Mr. English some time in 2014 while the POA was executed days before the 11 May 2015 elections. The POA effectively transfers ownership of the permits to the Chairman. This is quite unlike the GFC where the change of ownership and/control of a State Forest Authorisation is prohibited. If this happens, the Commission has to be informed, and the holder surrenders the permit to the Commission. At the moment, there is a huge concern that the GFC might have breached the Guyana Forestry Act by allowing the officials of Baishanlin to acquire controlling interest in a number of logging companies. This gives Baishanlin effective control of 627,000 hectares of State forest, the second largest concessionaire, the largest being Barama Company.
Response from the GGMC
GGMC contended that the Board, inclusive of the Chairman, is not part of the processing of applications for Mining Permits. Rather, the law requires the applications to be signed by the Commissioner and then submitted to the Chairman to countersign to give legal effect to the document. It also stated there are numerous members of the Board who currently have vested interests in mining and own mining properties.
GGMC further contended that the GGMC Act: (a) does not preclude members of the Board from owning mining lands or having interest in mining; (b) specifically provides for persons appointed to the Board to have the expertise and capacity in the areas of the functions of the Commission, such functions being in relation to mining; and (c) allows for Board Members to be owners of mining lands or to have such interest. In addition, previous chairpersons held interest in mining properties.
Analysis of GGMC’s response
The response focused on the processing of applications for mining permits. However, it is the Board that has to approve of such applications. The Chairman of the Board would have been party to the decision to grant the mining permits to Mr. English. A year after, the Chairman took possession of the land via a POA. Was there any disclosure of this at the very next board meeting, and if so, what position did the Board take? In addition, inasmuch as the law is silent in relation to Board members acquiring mining permits, good governance would suggest that such a practice is unhealthy and can present a serious conflict of interest.
As regards the criteria for the appointment of Board members, the schedule to the GGMC Act states that “The persons appointed by the Minister as members of the Commission shall be persons who, in his opinion, are qualified for appointment by reason of their experience of, and shown capacity in, matters relating to the functioning of the Commission or matters which will be advantageous to the Commission in the performance of its functions”. It does not necessarily follow that members of the Board have to be the holders of mining permits. Indeed, prior to his becoming Chairman of the GGMC, Mr. Williams was not known to have had any experience or expertise in mining activities. In addition, contrary to GGMC’s assertion, there is no provision in the Act that specifically allows for Board members “to be owners of mining lands or to have such interest”, and the absence of such a provision does not suggest that the law permits such a practice. Further, the fact that previous chairpersons might have held interest in mining properties is no justification for a continuation of this undesirable practice.
