The Ministry of Natural Resources (MNR) has hailed Tuesday’s lifting of this country’s temporary suspension from the global Extractive Industries Transparency Initiative (EITI) as a significant milestone for Guyana.
The GY-EITI website provided the background and condition for the suspension and its lifting, “The EITI Board temporarily suspended Guyana on 1 February 2023 for failing to publish its 2020 EITI Report. In accordance with the EITI Standard, it was agreed that the suspension would be lifted if the EITI Board is satisfied that the outstanding EITI Report was published within six months of the (new) deadline. The Secretariat can confirm that Guyana published its 2020 EITI Report on 30 June 2023. Thus, the condition for lifting the suspension has been met.”
A statement from MNR said, “This significant milestone follows the successful submission of Guyana’s EITI Report for the reporting year 2020, demonstrating the country’s commitment to transparency and accountability in the extractive industries.”
Noting Guyana’s February 1, 2023 suspension from the EITI was a “result of the delay in submission of the report within the prescribed timeline,” the statement added, “Without compromise, this report’s submission was done one month ahead of its July 30, 2023 deadline — made possible through diligent work done by the Government of Guyana through the Ministry of Natural Resources, the EITI Secretariat and all relevant stakeholders. The submission of this report, which provides comprehensive information on Guyana’s extractive industries, highlights the government’s commitment to transparency and its dedication to upholding global best practices”, it said. “Notably, the government has already begun working on the 2021 report”, MNR added.
MNR’s statement reaffirmed the ministry’s commitment to “advancing transparency, accountability, and good governance in the extractive industries,” and stated that, “We will continue to work closely with all stakeholders to strengthen systems, improve reporting mechanisms, and promote the sustainable management of Guyana’s natural resources.”
The report explained that the objective of its compilation and publishing is to help understand the level of contributions by the extractive sector to the economic and social development of Guyana and improve transparency and good governance at all levels of the extractive industry value chain.
BDO LLP
Accountancy, tax and advisory services’ firm, BDO LLP, was appointed as Independent Adminis-trator to prepare the third GY-EITI Report for the year which ended 31 December 2020. Accord-ing to the report, the engagement was carried out in accordance with the International Standards on Related Services.
“The procedures performed were those set out in the terms of reference as defined in the amended ‘Contract for Consultants’ Services’. The reconciliation procedures carried out were not designed to constitute an audit nor a review in accordance with International Standards on Auditing or International Standards on Review Engagements and as a result, no assurances on the transactions beyond the explicit statements set out in this report are being expressed,” the report states.
The Guyana 2020 report comprises a summary of the legal framework and fiscal regime, overview of Guyana’s extractive sector, contributions of the extractive sector to Guyana’s economy, production data, and the State’s shareholding in extractive entities, including revenue allocations, license registers and license allocations. The report stated that total revenues received from the extractive sector for the fiscal year 2020 amounted to $93.77 billion.
“Revenues collected by the Ministry of Natural Resources (MNR) and Guyana Revenue Authority (GRA) accounted for 44% and 30% respectively of the total revenue streams generated by the sector, followed by those collected by the Guyana Gold Board (GGB) accounting for 15% of total extractive industry revenues,” the report said. Oil production and that sector saw a sharp increase of some $54.5B for that year. “This is mainly due to the drastic increase of the oil and gas sector’s revenues by $51.62 billion. The mining sector’s revenues increase of $2.96 billion is due to the increase of gold production value during 2020.”
Using various data graphs and tables, the report said that “$41.36 billion in revenue relating to the royalties and profit oil was collected by MNR from the oil and gas sector during the fiscal year 2020…” The increase in GRA’s revenues by $8.42 billion was due mainly to the tax revenues generated from EEPGL activity which increased from $12.26b in 2019 to $21.62 billion in 2020. GGB also saw an increase of $4.02 billion in its revenue resulting mainly from the increase of the gold production value, compensating for the decrease in gold production volumes. EEPGL started oil production on 20 December 2019 and the first lift was carried out on 19 February 2020.
According to the Bureau of Statistics (BoS), the Gross Domestic Product (GDP) from forestry, fisheries, mining, and oil and gas sectors for the Fiscal Year 2020 amounted to $329.96 billion or 31.13% of total GDP. The contributions of all four sectors to Government’s revenue amounted to $93.78 billion, accounting for 37.37% of the total domestic revenue for that period. The export value from the extractive sectors amounted to $471.71 billion or 84.69% of the total exports of the country in 2020. According to the Guyana Labour Force Survey, for 2020, of a total of 264,862 employed persons in Guyana, 40,952 or 15.46% were employed in the forestry, fisheries, mining, and oil and gas sectors.
The Extractive Industries Transparency Initiative is a global Standard to promote open and accountable management of natural resources. It seeks to strengthen government and company systems, include civil society participation, inform public debates, and enhance trust. In each implementing country, it is supported by a Multi-Stakeholder Steering Group (MSG), which comprises government agencies, extractive companies and civil society organisations working together. The EITI Standard sets out the requirements which countries need to meet in order to be recognised, first as an EITI implementing country and subsequently assessed against the EITI Standard. The Standard is overseen by the EITI Board, which comprises members from governments, extractive companies, and civil society.
The adoptable 2020 EITI standard encourages countries to make use of existing reporting systems for EITI data collection and make the results transparent at source. That Standard introduced new aspects on environmental, social, and gender impacts. It also breaks ground for the disclosure of the identity of the real owners – the ‘beneficial owners’ – of the companies that have obtained rights to extract oil, gas and minerals starting from 2020. A revised Standard was adopted on June 12th 2023 at the EITI Global Conference in Dakar, Senegal.
