The illegitimate Natural Resources Fund

President David Granger has just signed the “Natural Resources Bill”, which is the name of our “Sovereign Wealth Fund” and which arguably deals with the most important issue since the granting of our independence. The fundamental question is how are the funds that would be generated from our oil reserves be utilised to deliver the greatest benefits to Guyanese of this and following generations. But just as arguably, while the President might have signed the Bill, he did not sign it in law.
The substantive contents of what should be covered in this Bill had been widely discussed ever since oil was struck by the Exxon Consortium in May 2015. It had been drafted under the aegis of Natural Resources Minister Raphael Trotman, then responsible for oil, and passed on to Finance Minister, Winston Jordan, two years ago to pilot through the National Assembly. However, Jordan sat on it until the sitting of the Assembly on January 3 of this year, which followed the December 21, 2018, sitting during which the No-confidence Motion brought by the People’s Progressive Party (PPP) had been successfully passed. And as mandated by Article 106 (6), the “President and Cabinet shall resign”.
The Opposition PPP had indicated that it would not be attending that January sitting on the grounds that the No-confidence Motion had unleashed a governmental regime where new elections had to be scheduled (by March 19) as precedent dictated in other parliamentary democracies such as Britain and India. However, under cover of requesting the Speaker to reverse his ruling that the NCV was legitimate (he refused to so rule) the PNC-led coalition scheduled the session and slipped in the NRF Bill, which was passed in the absence of the Opposition.
But the Government’s own consultants from the foreign non-governmental organization “Natural Resources Governance Institute” (NRGI) had explicitly warned them at a public lecture organised by the Guyana Revenue Authority discussing the Green Paper on the NRF, that there must be “an open discussion and consensus building between the political parties to look at these rules that will be governing your money… and agree on how Guyana as a whole will be managing its money.”
The consultants were very clear as to why they recommended this democratic consensus: Guyana would not want a new administration to change the rules of the NRF because of the lack of a wide legitimacy of those rules. This would wreak havoc on Guyana’s return on investment and only benefit the Fund Managers. The consultants had also indicated that in this world of Wall Street Gordon Gecko types, there should be explicit strictures against investing in highly risky investments just for their purported high returns. But there was an even more pressing reason why Jordan should not have rushed through the NRF Bill: as Opposition Leader Bharrat Jagdeo said, it was “illegal” because the status of the PNC-coalition Government, which as in other democracies after a no-confidence vote, dictated that they only conduct routine business until a new Government is elected and certainly not wide ranging business such as the establishment of a Sovereign Wealth Fund.
But what made President Granger’s signing of the NRF Bill at this point in time very unsavory, is that after an initial period of bluff and bluster, he has conceded it is not “business as usual” for his Government in that, for instance, there could be no Cabinet meetings and Ministers were now meeting in a “Ministerial Plenary”, whatever that may be. The signing of the NRF Bill is just another in a long string of illegalities committed by the PNC-led Government in refusing to acknowledge the supremacy of the Constitution. As several scholars have adumbrated, the filing of appeals against the rulings of the Chief Justice against his Government’s contentions cannot stay the ruling of the Speaker of the National Assembly that the No-confidence Motion was validly passed.
We will have to go back to the drawing board on a new, legitimate, NRF.