Board of Directors for oil fund part of int’l standards – Pres. Ali

The newly-proposed Board of Directors to manage Guyana’s Natural Resource Fund (NRF) is not only geared at stripping the overpowering ministerial influence in the current law but it is also part of international standards for good governance.

This was the view of President Dr. Irfaan Ali during a virtual address on Tuesday, where he spoke about the proposed amendments to the Natural Resource Fund (NRF) Act.

The President highlighted that the governance structure of the existing Act is severely deficient since it has no governing body. The current Act empowers the Finance Minister to manage the oil fund and decide how the revenues will be spent.

Importantly, too, he noted that such a governing body is recommended by the Santiago Principles.

These Santiago Principles promote transparency, good governance, accountability and prudent investment practices whilst encouraging a more open dialogue. And, it states that a Board of Directors or Trustees can be used as a governing body.

Previously, President Ali told the News Room that the members of the Board will be people of integrity, who possess the necessary expertise to manage an oil wealth fund. The proposed amendments state that the President will make these appointments.

The existing NRF Act, which was passed by the previous APNU+AFC coalition government had been defeated, following the successful passage of a no-confidence motion.

Though the Act was subject to some consultations, that Act did not get any input from the PPP/C parliamentary opposition, which is currently in government. That, coupled with key shortcomings of the Act, prompted these proposed amendments.

As per the amendments, a Board of Directors is being proposed as part of efforts to distance the management of the fund from ministerial influence. As such, no Member of Parliament can be part of this Board.

“The old Act did not allow for any of this.

“It was the sole, authoritative authority of the Minister of Finance,” the President emphasised.

Now, he said that the Board of Directors will “drastically reduce” the functions and responsibilities of the Finance Minister, vesting the powers in the Board instead.

The President also pointed out that the country’s Finance Minister can be jailed for 10 years if he/she fails to tell Guyanese about oil monies received by publishing that information in the Official Gazette.