Challenging the assertion by the Guyana Gold and Diamond Miners Association (GGDMA) that mining is an essential service, Policy Forum Guyana (PFG) is calling for the industry to be stripped of that classification, while saying that it does not qualify as a service needed by every citizen, but rather to make a small number of wealthy men even wealthier.
Government has classified mining as an essential service, thereby exempting the industry’s operations from some COVID-19 restrictions.
PFG, a network of civic organizations that seeks in part to strengthen accountability in the extractive industries, is contending that rather than a service, “the mining industry is so ill-regulated” that apart from preventing any accurate assessment of its contribution to the economy, it poses a major threat to the well-being of all interior communities.
In a press release, PFG said the concept essential service was originally coined to identify those services, such as water, electricity, policing and health, which every citizen needs.
The PGF said that the GGDMA in support of its contention of mining being an essential service is reported as asserting that “Guyana’s much needed foreign exchange earnings would decline and that could cause widespread economic problems for the country…. we are also essential because we contribute consistently to over 55 per cent of the foreign currency earnings.”
The PGF has opined, however, that “no matter what contribution the industry makes to export earnings, this is not a criteria [criterion] of ‘essential.’”
On the contrary, it advances that “a mother earning money to feed her children by selling plantains in La Penitence Market has a more serious claim to being an essential service than the gold industry, as do the many school-feeding programmes which have had to cease.”
The release stated that one of the world’s largest accountancy firms, BDO, conducted an assessment of the extractive sector, contracted by the Guyana Extractive Industries Transparency Initiative (GYEITI) in 2017 and their report, is a damning indictment of the gold-mining industry in Guyana.
According to PFG, recommendations from the GYEITI Report for Fiscal Year April 2019 paint a picture of an industry which operates in a manner that obscures and frustrates any attempt by outsiders to understand the truth of any aspect of their operations.
It went on to say that this system has benefitted from decades of revolving door appointments, whereby leading miners assume senior posts in the Guyana Geology and Mines Commission (GGMC), Guyana Gold Board (GGB) or other related agencies, only to return to the industry as consultants regardless of the multiple conflicts of interests involved.
The PFG was quoted as saying that “the consistency of these features render it difficult to interpret them as coincidental, but rather points to a systematic and deliberate intent to resist scrutiny.”
The release stated that, among other things, the report noted that financial data is not systematically subject to independent audits and that the GGMC and the GGB did not report royalty payments and production details by project because disaggregation and reporting at project level does not take place.
The PFG said the GYEITI recommended that both the GGMC and GGB ensure consistency of exports data with the production data, while noting that government agencies’ records on exports were different from one another as well as from the companies’ records.
The PFG noted from the report that while GYEITI understands that the GGMC and GGB do not systematically crosscheck exports data with the Guyana Revenue Authority’s records to identify the potential discrepancies, a centralised cadastre system does not currently exist.
It said that while the list of claims is computerised, the records of mining licences and permits were kept manually using different spreadsheets and that the register of licences and permits do not provide detailed information, preventing GGMC to both fulfil its licensing authority duties and to ensure an effective oversight of the extractive industries.
The GYEITI, according to PFG, said that the only means of identifying the licences awarded to a same licence holder was by the entity’s name, which was misspelt from one licence/permit/claim to another, which does not allow GGMC to conduct proper analysis on the rental fees due by each extractive entity. GYEITI further noted that several mining permits, covering plots in the same location as per GGMC’s list of permits, had been awarded on the same date to the same applicant following the award process of medium scale mining permits instead of following the award process for large-scale mining licenses. The total combined acreage of several mining permits awarded during Fiscal Year 2017 to a same applicant exceeded 1,200 acres, which is the maximum surface for a medium-scale mining permit.
The report, according to PFG, noted that if these plots had been combined, they would have exceeded 1,200 acre threshold and would have been categorised as being “large-scale tenures”, which would involve paying higher rental fees and the licence award procedure requiring further approvals from other government agencies
The report, PFG said, also noted the annual rental fees due by large-scale operators is US$3 per acre as opposed to US$1 per acre for medium-scale mining operators and that the total shortfall to the government as a result of such errors may reach considerable amounts per annum. It added that GGMC and GGB do not have their own procedures and systems in place to collect and control production data reported by mining companies and that the minerals’ production data at both GGMC’s and GGB’s levels do not match production volumes declared by the extractive entity.
According to PFG, while the government agencies have begun to take steps to address some of these issues, the GGDMA is still to cooperate with the EITI process and that the observations made “ensure that the administration of the sector remains sufficiently chaotic, that this massive sale of public assets for private gain is never sufficiently understood. Individuals are granted hundreds of permits which they have neither the resources nor capacity to exploit, but landlord them out to smaller operators.”
The PFG concluded by stating that what is beyond question, however, “is that an activity whose purpose is to make a small number of wealthy men even wealthier cannot be categorized as an essential service” while calling on the National COVID-19 Task Force to remove this anomaly.
