GUYANA: Guyana Oil Company (GUYOIL) turmoil – inquiry into corruption launched

By   – Commentary   

While there is still much to be learnt about what has transpired, the ongoing turmoil at the Guyana Oil Company (GUYOIL), will be a test of the PPP/C government’s professed intolerance of corrupt behaviour and commitment to good governance.e

On the sidelines of an event at the Dharm Shala on Friday, Minister in the Office of the President with responsibility for Finance, Dr Ashni Singh was pellucid when he stated, according to the Department of Public Information, “We have absolutely no tolerance in this government for any corrupt practices…we would be guided by the results of the Auditor General. I assure you that we will take combined action against any parties, who might have been, in the event of any inappropriate practices being identified”.         

Following the allegations that have swirled around GUYOIL over reputed arrangements for the purchase of a shipment of oil, Dr Singh invited the Office of the Auditor General (OAG) to investigate the matter. That move is quite unusual when the normal course of action would be to refer any alleged corrupt behaviour to the police for investigation and the possible laying of charges. The OAG has no locus standi as it relates to questioning, for example, the person who is alleging that he was in the midst of the sale of a cargo of oil to GUYOIL. This would require the so-called “confrontations” organised as part of police investigations..
Furthermore, there is no transaction for the OAG to audit as what was allegedly transpiring was off the books and not in keeping with procurement procedures. In this case, the origins of text messages and calls will have to be investigated, a task out of the ambit of the Auditor General’s office. The OAG could end up presenting an undue delay in the determination of this matter and the assignment should be withdrawn from it and transferred immediately to the police and one of their specialised units. One hopes that their investigative skills in this area have been bolstered.

The sudden sending on leave of the former General Manager, Mr Trevor Bassoo who had only been appointed in October of last year and his subsequent decision to resign immediately raise red flags. The manner and swiftness of his appointment last year signal that Mr Bassoo had the confidence of senior members of the administration so the abrupt end of his tenure in the lead up to the allegations is puzzling. Mr Bassoo has been adamant that his departure has nothing to do with the allegations surrounding the purported fuel transaction. If so, his being sent on leave and subsequent resignation are all the more puzzling when one considers that he said that on Wednesday, April 14, at 20.24 pm he emailed the Board of Directors (BOD) of GUYOIL “to advise that representatives of (Aaron’s Realty Inc) reached out to me expressing their dissatisfaction with specific officers of GUYOIL, and of their intention to go to the media to expose corruption. In that email (a copy of which could be obtained), I also advised that I suggested to the Aaron representatives that they should reach out to GUYOIL BOD first to seek redress. I forwarded to the BOD the email that I had received from Aaron representatives (a copy of this email could also be obtained).”

It is unclear why Mr Bassoo had any dealings with Aaron’s Realty in the first place and worse, advised it to reach out to the BOD to “seek redress”.

Surprisingly, Mr Bassoo said that the following morning he was called to the Charlotte Street office of the Chairman of the GUYOIL BOD, Mr Paul Cheong, where he was handed a letter sending him on administrative leave. “The letter further stated that the BOD would conduct a performance review of his tenure as General Manager”, according to Mr Bassoo. It is unclear what led to the decision to send Mr Bassoo on immediate leave and this should be explained by GUYOIL. Why any member of its board was in contact with Aaron Realty on matters properly within the purview of the company’s management also needs to be explained. Surely after so many decades in business GUYOIL has long-established procedures for inviting interest in procurement from pre-qualified or reputable suppliers. The antecedents of Aaron Realty would seem to immediately rule it out of contention in such transactions.

The state of affairs at GUYOIL also raises the question of the quality of appointments to state boards. Appointments to boards such as GUYOIL, GuySuCo, the National Procurement and Tender Administration body etc should be merited and should carefully take account of the skills and backgrounds of appointees. PPP/C governments in particular have had a hazardous policy of doling out board positions to cronies, representatives of political parties who have been their allies and sundry nondescripts. This policy has as a subset the notion of inclusive governance i.e. involving as many persons from the political directorate and other parts of society in the boards of state entities. This is all well and fine except that the appointees should undergo some due diligence after nominations are made and where they should be excluded they should be.

With Guyana a signatory to the Inter-American Convention Against Corruption and having been part of its follow-up mechanism for implementation (MESICIC), the government should pay careful heed to the recommendations that were made in the last evaluation in 2017 on matters such as whistle-blowing and bribery. The PPP/C’s legislative agenda thus far has not been impressive and it can certainly advance many of the outstanding recommendations under MESICIC which make eminent sense.

In particular, the Committee of Experts made the following recommendations in their 2018 report which have not been addressed: “Modify Section 338 (2) (a) of the Criminal Law Offences Act, so as to make it more fully consistent with Article VI(1)(a) of the Convention, by incorporating therein, the elements of directly or indirectly accepting a bribe by a public servant or soliciting it.

“Modify Section 338 (2) (b) of the Criminal Law Offences Act, so as to make it more fully consistent with Article VI(1)(b) of the Convention, by incorporating therein, the elements of directly or indirectly offering a bribe to a public servant

“Criminalize those who act as accessories after the fact with respect to corruption offenses, as required by Article VI(1)(e) of the Convention”.

Whether the PPP/C government is serious about battling corruption and acts which appear to engender it will be seen in the type of examination mounted of the GUYOIL contretemps.  The government has already failed the test as it relates to explaining the award of two trawling licences under the Ministry of Agriculture.
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  • guyaneseonline  On 04/27/2021 at 11:01 pm

    Apr 26, 2021 Features / Columnists, Peeping Tom – Kaieteur News
    Kaieteur News – Problems with fuel importation began when the PPP/C started to issue licences to companies other than the Big Four – Esso, Texaco, Shell and GUYOIL – to import quantities. The oligopoly held by these four firms did not result in any of the price-scheming plans which we are witnessing being hatched today.

    Fuel and lubricants constitute a significant chunk of Guyana’s total imports. In 2018, fuel and lubricants imported amounted to US$513M or more than 20 percent of the country’s total imports. This was US$118M more than the previous year of which such imports was almost a quarter of total imports. In 2019, petroleum imports amounted to US$524M.

    High market share and high taxes tend to attract problems. In order to avoid such problems, the government in the past allowed the fuel imports to be controlled by the Big Four.

    However, vested interests were knocking at the doors. There were interests who wanted to import their own fuel rather than buy from local suppliers. These interests wanted the right to import and store fuel for their own use.

    The PPP/C originally was opposed to this. But after years of resistance, the PPP/C allowed for the Trawlers Association of Guyana to import its own fuel. The Trawlers Association invested in its own bulk storage facilities.

    The PPP/C also granted an import licence to another business which operates a gas station. This set a dangerous precedent and opened the floodgates for private individuals to apply for fuel import licences when the APNU+AFC took office.

    A mere five weeks after gaining office, the APNU+AFC granted a fuel licence to a company which was only registered three months prior to the May 11, 2015 general elections. The grant of another licence months later, ignited a stinging rebuke from the Mirror newspaper which pointed to the speed with which these licences were granted considering that an importer is normally required to have bulk storage tanks, obtain an environmental impact assessment and at least four other permits concerned with storage, transportation, safety and importation.

    Among the new entrants as fuel imports were United Petroleum Inc., Atlantic Fuels, China Zhonghao Inc., SBF Petroleum and KB Enterprise.

    Now the PPP/C is back and embroiled in another controversy concerning the importation of fuel, this time involving the Guyana Oil Company. Reports indicate that the Auditor General has been called in to investigate this matter which also involves a private firm which claims that it has an oral agreement to sell fuel to the state-owned entity.

    Another section of the media is reporting that the private company does not have a licence to import fuel. But that is irrelevant. The company is not prohibited from selling to an importing company. This means it can sell and GUYOIL can import.

    GUYOIL needs to explain why it was buying fuel from a middle man rather than from an established supplier. The APNU+AFC had switched to buying fuel from Trinidad after it soured relations with Venezuela and it had experienced supply problems with Curacao.

    But after the Trinidad government closed PETROTRIN, Guyana had to scamper to guarantee regular supplies of petrol. This may have led it to buy from middle-men.

    The present controversy therefore is part of the wider issue of sourcing fuel supplies. The state-owned GUYOIL should revert to the old arrangements of buying directly from the refineries or their agents, rather than sourcing fuel through middle-men.

    Government cannot control who private licencees buy from. But it can certainly determine from whom the state-owned company procures its supplies. Fuel is highly competitive business. Sales tend to be high volume and low margins.

    If GUYOIL is to compete and act as buffer against price-fixing, it needs to be able to source the best prices. It should therefore, seek to do so directly from source rather than through middle-men.

    As much as attention is being paid, at present, to whether there was any demand for kickbacks in the present controversy, the wider issue should not be ignored. GUYOIL needs a reliable supplier which would allow it to compete with the many other fuel importers which have been licenced to import fuel.

    (The views expressed in this article are those of the author and do not necessarily reflect the opinions of the Kaieteur News newspaper.)

  • guyaneseonline  On 04/28/2021 at 7:44 pm

    GUYOIL Chief Finance Officer and director to be removed – President

    By Stabroek News – April 28, 2021

    As investigations continue into the scandal over fuel procurement at GUYOIL, President Irfaan Ali today said that the Chief Finance Officer of the state-owned company, Shawn Persaud and Board member, Akanni Blair will be removed from their positions as the duo had “inappropriate” contact with the importer.

    This was revealed at a press conference held at State House this morning. Questioned about the ongoing scandal at GUYOIL, the president stated, “No fraud was committed because no transaction was entered into.”

    He added, however, that all those who had inappropriate contact with the importer must be removed and identified Persaud and Blair as being among those involved. He added that Chief Executive Officer (CEO) Trevor Bassoo was asked to proceed on administrative leave after a performance evaluation but he has since resigned and this has not changed.

    Bassoo has denied that his departure was in any way connected to the current controversy over a fuel shipment allegedly imported by Aaron Royality Inc (ARI), who is claiming that he is now left with a large quantity of fuel on hand after commitments were made by some company officials that GUYOIL would buy it. The dealer claims that he has evidence of the commitments by officials of the company who also tried to solicit kickbacks in return for the company’s purchase.

    Following the allegations of procurement irregularities, Finance Minister Dr. Ashni Singh invited the Auditor General to investigate and sounded a warning that corruption will not be tolerated.

    GUYOIL also denied the allegations, saying that while ARI was one of several companies it had been in discussions with, it had not contracted the company to supply fuel. “There is absolutely no truth to this allegation,” the company said in a statement.

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