Guyana's Oil Contracts and Governance
Dear Editor,
“In the final analysis, wisdom and pragmatism will pave the way for a prosperous and resilient Guyana”: Professor Dr. Stanley Paul, The Stabroek News, January 7, 2025, “Guyana should focus on extracting maximum value from the existing PSA rather than pursue a path that could imperil its economic stability.” “Parliament can cancel contracts even if the enactment has the effect of expropriating property or causing hardship to innocent parties who negotiated in good faith”: Ontarian law professor ([email protected]) with a background in free markets and the rule of law, who taught at law schools in Canada, US, and New Zealand. He quotes West Lakes Ltd. v. South Australia (1980), 25 S.A.S.R. 389 – “Ministers of State cannot through contractual obligations, entered into on behalf of the State fetter their freedom, or the freedom of their successors or the freedom of other members of parliament, to propose, consider and, if they think fit, vote for laws, even laws which are inconsistent with the contractual obligations”, in his proposition that ‘One party has the power to alter the agreement, no negotiated conditions can eliminate the risk of future legislated changes, and that anyone trying to avoid this slim sovereign risk should make their agreements not with a government official,’ he argues governments can swear on their “grandmothers’ graves,” but that’s ineffective: statutory language trumps contractual provisions. He argues that democratically elected governments establishing their policies and making unilateral changes to agreements ensures predecessors on government benches can’t control policy decisions beyond the terms of their democratic mandates by signing long-term contracts that reflect their policy preferences while sitting on opposition benches. Such agreements would set things in stone rather than for four years.
Kiana Wilburg, an outstanding journalist in her piece in one of the dailies of August 5, 2018, captioned “All oil contracts should be renegotiated, UNDP – provides a strategy to help Guyana”, cover the views of a consultant who cites legislation – the Local Content Act – suggesting that it may offer impetus to Guyana’s economy. A learned consultant canvassed the Tanzanian Natural Wealth and Resources Contracts (Review and Re-Negotiation of Unconscionable Terms) Act 2017 and the Ghanaian politico-economic contract with a foreign oil company. Ganga Persad Ramdas, a Guyanese, states that the agreement did not foresee these extraordinary changed circumstances and should be “renegotiated to uphold Guyana’s Constitutional Laws; laws to protect all and sundries – people from contracting to overcome Sovereign Tax laws: The Stabroek News January 7, 2025 “The PSA 2016 agreement should be renegotiated to uphold Guyana’s Constitutional Laws”. A well-respected young lawyer and Guyanese parliamentarian writes that the “stabilization clause” means that changes incur compensation. Professor Bruce Pardy, currently on leave from Queen’s University Faculty of Law, says compensation claims against the Ontario government are usually met with harsh rulings by judges who do not grant injunctions or orders specific performance against the Crown. Common sense and conscience garnished with astute political drive and a strong sense of personal efficacy may serve Guyana well. A US lawsuit seeks to hold ExxonMobil accountable for misleading the public, says California Attorney-General Mr. Rob Bonta on Monday, September 23, 2024: [email protected]. The learned A-G Chambers on untested affidavit evidence states that ExxonMobil is engaging in a decades-long campaign of deception, and Law Officers intend to prove so in court. Are our A.-G.’s Chambers posh enough on Carmichael Street, Georgetown, to do these sorts of lawsuits if data becomes available in Guyana about any alleged deception that A.-G. Rob Bonta refers to concerning ExxonMobil in California?
The first rule is to abide by the contract with the electorate. What is the purpose of an election? Can one in public office become so complacent and lethargic by simply saying the previous government signed off: “It is nah me business.” In the 5 years when a Guyanese Government Minister is in charge of the coffers, who’s the gatekeeper? Is it the chief whip of the Opposition? The Chief Whip on the Government side? The electorate who put her there? What of the Minister who takes over her job and starts scrutinizing the coffers after an election – who is this second officeholder’s gatekeeper? Editor, tens of thousands of Guyanese must be screaming their heads off in 2025 to cancel the contract, not renegotiate it. For a country to be economically viable when very savvy (and if Mr. Bonta’s case finds favour with the judge) deceiving corporate business people are on the other side, good governance is mandated and must prevail. Guyanese political actors shall counteract to do the right now – that is natural law, such law theorizing that we are born with a moral compass to distinguish the “rights” and “wrongs” in life. Under natural law, everyone has the right to live, the right to happiness. In Guyana, we draw good salaries these days. A very competent and knowledgeable Guyanese politician’s statement: “It is criminal to draw a monthly salary and don’t intend to do the job paid to do ” comes to mind. It seems to me that in order to extract maximum value from the existing Profit Sharing Agreement, Guyana should start by considering two appropriate techniques – collaborative law and facilitation. These techniques can be employed when dealing with foreigners if renegotiating or canceling. A leader in power cannot ignore the will and desires of his people. He must be empathetic.
Sincerely,
Mohamed Shabeer Zafar Barrister-at-law and Solicitor Windsor, Ontario, Canada
Appeared in Stabroek News as A democratically credentialed Guyanese leader in power cannot ignore the will and desires of the people on the 2016 PSA on Saturday, January 11, 2025.