Monday, Dec 18, 2017
Government | South America | Guyana

Ministry Of Governance

“It’s almost as if we’ve been given a second chance at developing our country together, and we plan to seize that opportunity”


2 years ago

Raphael G. C Trotman, Minister of Governance, Guyana
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Raphael G. C Trotman

Minister of Governance

Raphael G. C Trotman, Minister of Governance of the Cooperative Republic Of Guyana, explains the dynamism that now pervades the country under its current wave of transformation and turning ‘potential’ into ‘reality’.

 

Guyana is facing a new era under the leadership of David Granger, who, in our interview, spoke to us about the fresh approach of the new government. Can you please share with us your views regarding this “new Guyana” and this new “fresh approach”?

A fresh approach is a phrase now that has become quite popular, but after 23 years I believe that the government became somewhat stale, as happens if you have one administration in place for one or two decades or more. President Granger brings something different in the sense that he has not been known to be actively involved in politics. He comes from a military background, but he’s more of a gentleman officer, and I believe that that is something that the country needed to have. Good, astute leadership, and leadership of course with integrity, with vision, and that permeates the approach. The fresh approach is really a “freeing up”. When the election results were given, there was much celebration around the country.

It has also spawned a massive cleanup campaign around the city and elsewhere, and I believe people do expect that it’s somewhat of a new beginning. It came, of course, on the eve of us celebrating 50 years of independence, which is next year, and on the weekend before the elections, we did have an announcement that a significant oil find had been made by an ExxonMobil exploratory team. All of this seemed to combine to speak to us, to say that something new was happening, that it was a new and refreshing wind blowing through the nation, and that is really how we see our fresh approach. It’s almost as if we’ve been given a second chance at developing our country together, and we plan to seize that opportunity.

 

US Exxon revealed it had found a massive offshore Oil & Gas deposit. Experts suggest that this oil deposit could be worth US$40 billion, at least 10 times Guyana’s GDP. The new government has been very clear in the need of managing these new resources in a prudent way. How can this significant discovery change the course of Guyana’s economy, and how is the government working on maximizing the benefits of this discovery?

Well, firstly we shy away from actually ascribing a figure in terms of quantity or quality, or even trying to monetize the value, except that the find is considered significant I believe, in terms of the industry. That means that it’s of some value, but we’re trying to keep ourselves grounded in not getting ahead of ourselves, and so much effort is being placed on still continuing on a green path. Even though we’ve known that oil has been there, but now that we’ve actually confirmed it, we don’t intend in any way to forsake the pursuit of a cleaner environment, a better standard of living, a fresher approach. Sacrificing that at the altar of just developing our industries is not what we will do. We hope to look to countries, Norway is one that comes to mind immediately; we look to countries like Norway, that have pursued renewable energies, the use of hydropower, be very conservative in the way our money is spent and so forth, whilst at the same time exercising good stewardship and management of the resource.

We are taking advice, looking at the good and bad, recognizing that no one model will fit for us exactly, but we have to adapt perhaps several, and we’re seriously pursuing the establishment of a sovereign wealth fund, which we hope to put in place before there’s any production of oil, but just as importantly as well, we would like to bring a percentage of all of our resources into this fund. It wouldn’t just be finance from oil revenues, but from gold, diamonds and timber. I like to add water now, because for too long we’ve really just been allowing our rivers to just run into the sea, and the world is going to face a shortage of water, so we see water as being important as well. All of our resources we hope to harness and preserve for the benefit of future generations.

 

In July, you attended the US State Department meeting on energy governance. The US agency stated that the objective of the meeting was to help such countries establish the capacity to manage their oil and gas resources responsibly. Can you please share with us how this meeting was? How can Guyana ensure transparency in this extractive industry?

The meeting was very important for us, because it took place within weeks of government taking office. From two points of view, of course America has always been a close friend, to others in the region, but to Guyana as well, and also because ExxonMobil being an American company, we thought that we should speak to US government. We did have, for all intents and purposes, an induction course in the policy side of the industry, management and looking at things of environmental management, safety and energy governance. It was quite helpful, we were able to meet important people, get perspectives on fiscal regimes, taxation policies and so forth, so we value that meeting highly, because it was the first of its kind, immediately after taking government.

 

Guyana is primarily a producer and exporter of commodities, however, natural resources bring a lot of opportunities to added-value production, especially in sectors like mining or forestry. Foreign direct investment is key to boost value added production. How is the government working in diversifying its natural resources into added value production, and creating a friendly environment to foreign investors?

Value added is something that featured or loomed largely in the last political campaign. We just believe that too many multinationals and other companies were literally just taking our raw materials and not doing enough to add value. We don’t have a difficulty with some raw material being exported, we believe that we’ve got to spend more investing in value added production, so since taking office, I have mandated different agencies, forestry in particular, to curb the tendency for our logs just to be cut for export. The various companies have been spoken to, and they’ve all agreed, I think, to comply and to work with us. We see it as more of a partnership rather than using the basic approach of our regulatory agency just instructing the practitioners and stakeholders. We’ve been working with them to see how we could bring them up to the expected standards.

 

Now you are in charge of the natural resources of Guyana, how are you planning to improve the GGMC?

The Guyana Geology and Mines Commission (GGMC) is an interesting agency. I believe that it needs to grow to meet the new demands that are being placed on it. I believe from its formative stages of just overseeing, I would say “casual mining”. We now have to contend with two major international mining companies: one Australian, one Canadian, and thousands of people who are taking to mining given the higher prices. The GGMC therefore has to undergo some changes itself, and I believe we’re in the process of getting that done. It’s a process, and it also has to take into account its new role of overseeing oil exploration and production, which is something that it was never designed or oriented to do.

There is an oil and gas division of the GGMC, but government believes that we need to separate oil and gas completely and set up a whole new regime and authority to deal with oil and gas. For the moment, the GGMC performs that function as well, and is going through the growing pains of learning how to adapt to a changing, more mechanized industry with excavators and movement of heavy soil, stone, issues of the environment and reclamation of land, even mining pit construction and accidents and so forth. Within the last 8 to 10 years, the industry has grown by leaps and bounds, and I believe that the GGMC has not, at all times, kept pace with it, but we’re now spending more time on building that capacity.

 

One of the main challenges of this new government is to address the infrastructure deficit of Guyana. Both the oil & gas and the mining industry depend heavily on the infrastructure development of their nation, especially in the downstream. How do you assess the government’s infrastructure development plan?

Well, one of the things, it’s almost like a chicken and egg situation, but we’d like to use oil revenue not just to create a fund for future generations, but part of that fund we hope will drive the government’s infrastructure development program, and the government also in the short term will be turning to multinationals and to countries such as Brazil and China to assist us in that drive, but the revenue from the oil partly will be used to finance growth in the infrastructure. Roads, bridges, airports, and another part will be put away for generations to come.

 

Natural resources is no doubt one of the sectors that is most sensitive towards the environment and to the communities, and it’s important that all stakeholders work together to ensure sustainable development. How is the government communicating its commitment toward the sustainable development of these resources, and how are you working together with the rest of the stakeholders?

There’s always an ongoing tension between environment and natural resources development, so our manner of dealing with it is to have regular meetings, particularly with civil society. We, as the government embrace the ideals of the EITI, Extractive Industries Transparency Initiative, which is an international body, and so by subscribing to those principles and guidelines, it keeps you in focus and in line, and we work with the local organizations that play a watchdog role so to speak. We don’t always do what is pleasing to them, but we do listen and we try to correct wherever and whenever we can our missteps. Also, we’ve recently participated in an Open Government Partnership meeting in Mexico, and that too is something government is looking at, particularly from the extractive industries’ side. How do we share more information about the industry, what is happening, to make it of course more transparent and ensure better governance.

We believe that the tensions will always exist, and in fact without all those tensions, we won’t get the good government that we expect, so I think that the expectation is that civil society and other stakeholders, particularly those who are rightfully passionate about preservation and protection of the environment, need to be the ones that act as watchdogs over government, and there should never really be a high degree of comfort, because it means that one side is either lax or not doing its job. We continue to hold regular consultations and sessions with them, and as I said, where we’ve been chided or castigated, we meet and we try to take corrective action where we believe in fact that criticisms have been valid.

 

Guyana is a country that is blessed with natural resources and is very keen on promoting renewable energies like hydropower or wind. You have been speaking to the US Ambassador on how the US and Guyana can work together in renewable energies, so how is Guyana working together with the US in this sense, and how can synergies between both countries be created?

Well yes, in fact following our meeting in Washington in June, we were favored to have received a visit from the honored Secretary of State with responsibility for energy, Robin Dunnigan.

Next year, we are likely to have an exchange visit, looking at energy both from the oil and gas side, as well as the renewable energy side, and I think coming out of that visit, we hope to have some more concrete proposals. We are of course part of the Caribbean Energy Security Initiative, being a party to it, we know that we are entitled to access, expertise and even financing for projects, so I think after that visit next year, we hope to be able to make some concrete proposals.

The visit will be in a form of a study mission, so I would expect that we would visit, perhaps spend some time in Washington looking at the regulatory side, spend some time in a natural oil and gas setting, either on a rig in Houston or somewhere nearby, and then I think the expectation is that we would spend some time in California, where there is a lot of renewable energy installations.

 

The USA is Guyana’s top trading partner, it’s also one of the largest investors in the country. When we interviewed Minister Greenidge, he said that ExxonMobil could act as a catalyst to attract other US companies who may be now interested in investing in Guyana. How is the government approaching the potential US investors into this sector, and how can the US companies benefit from Guyana’s opportunities?

We continue to pursue what we call economic diplomacy at our various embassies and missions abroad, to showcase Guyana’s potential. We have received, in fact, there’s been an overwhelming response or applications for persons to explore for oil, gas, gold and other minerals, and we are processing them. Only yesterday, a team visited an interior location where an American company is likely to open what is perhaps going to be the largest gold mine ever opened in Guyana, because the commodity prices being a bit low, they’re stalling a bit, but certainly the belief is that that particular mine has several million ounces of gold to be mined. It’s owned by an American company, and quite apart from Exxon and this other, we have seen an upsurge in interest, and the government is open. We’d like to, and are working to make the playing field level and very discernible and defined. Of course, we know that things like our judicial and legal systems have to be accommodating as well, but it’s an all-round effort the various government ministries and departments are making to ensure that we are an open and good place to do business.

 

Are there any kinds of reforms or legislation, regulation that are being put in place to benefit the future?

I wouldn’t say so much on the regulatory or legal side, but certainly for example we have just re-commissioned our Guyana Office of Investment with our Minister of Business, a post which we’ve not had before. We’ve had a Minister of Trade, so there’s work going on there, and as I said, both locally and internationally, we are pushing Guyana as a destination for investment. Using of course the comparative advantage of being English speaking; we’re a population that is relatively well educated; our proximity to the US mainland, there are many flights now and we are hoping that we can attract a few more direct flights to Guyana from the US, so all of these are advantages that we’re playing up.

 

Natural resources are Guyana’s most valuable assets, it’s the country’s engine. Being in charge of the ministry is a very big responsibility, so how did you feel when you were given the opportunity to be a head of this ministry, and what would you like to have accomplished the day you leave the office?

It was a very humbling experience to be asked, because my background is in law and governance, and the president asked and he didn’t use the words Natural Resources, he said National Patrimony. I think that those words really sum up his outlook that this is really about the preservation for the future, and the sustainable use for those of us who are alive now, but at the same time our job is to hold it as stewards, manage and hand over something that is even better than we have now. My duty would be to continue the development, ensure that it is as transparent and as efficient a process as possible, and hand over to my successor a good platform upon which he or she can build in the future.

 

Next year, 2016, Guyana will be celebrating its 50th independence anniversary, it is the perfect time to celebrate and communicate all the things Guyana has achieved in this 50 years and all the opportunities the country has to offer. What would be the final message you would like to send about Guyana?

Well, part is really that Guyana is a small country that has a big punch, that we are open for investment, we are blessed with so many resources, we have a small population and therefore there’s so much that we can still absorb, so we welcome persons to come and share this experience with us, of developing a country that is waiting to be developed responsibly.

 

A lot of potential, right?

It’s full of potential, but we’ve got to move from – I’ve deliberately avoided the word “potential,” because it’s a word that we’ve all heard as children, so we’ve got to move from the potential to the actual reality. 



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