Small companies in the extractive industry were not required to declare payments made to the authorities when submitting information for the recent Guyana Extractive Industries Transparency Initiative (GY-EITI) Report because of the materiality threshold.
Speaking with Stabroek News recently, Head of the National Secretariat of the GY-EITI Dr. Rudy Jadoopat explained that data was requested from the various government entities, including the Guyana Geology and Mines Commission (GGMC), the Guyana Gold Board (GGB) and the Guyana Revenue Authority (GRA), about revenues received from entities in the industry. “GGMC and GGB submitted to us a list of payments they received in the year 2017. What we did as part of the process was have the Independent Administrator [BDO LLP] take those numbers and put [them] in a spreadsheet from each entity and we added them up so we got a total revenue collected from extractive entities,” he explained.
He added that given that there were thousands of entities, there was not… the time go through each of them nor did they have a system in place to do so and as a result, as part of the EITI requirement, the Multi-Stakeholder Group (MSG), which is made up of representation from civil society, industry and government, approved a materiality threshold of $75 million. “They determined a number which reflects revenue collected by the government from the extractive entities that is substantial and we take all those entities that fall within that range and above. When we add those revenues and all those companies that paid [the materiality threshold] and above were asked to report and those are what we call the reporting entities,” he explained, while noting that there were 34 entities at first.
However, Jadoopat noted that the GY-EITI is hoping that it will be able to solicit more data from other agencies, such as the GRA, the Environmental Protection Agency (EPA) and the National Insurance Scheme (NIS), so that it will be able to devise a different materiality threshold.
“Everything is important but because of the lack of time in preparing the first report we couldn’t take from the thousands of people and go ask each one of them. We got the data late also,” he said, while noting that most likely the materiality threshold for 2018’s report will not be the same but it is difficult to say whether it would be below or above what it was last year.
Questions have been raised as to whether GY-EITI will be able to record controversial transactions like those related to several small companies with which the Donald Ramotar administration clinched deals just days before the 2015 general elections. These companies for the fee of US$2,000 were licensed for lucrative oil blocks which they could later leverage with major oil companies. These deals are now the subject of an investigation by the State Assets Recovery Agency.
For the country’s second report, Jadoopat noted that they have so far approved the Terms of Reference for the Independent Administrator, which the MSG has to review and approve. Afterward, it will be sent to the EITI’s International Secretariat for approval and then to the Ministry of Natural Resources.
Finally, the tender documents will be prepared for the National Procurement and Tender Administration Board (NPTAB) to solicit bids and identify a contractor.
