UNDUE DILIGENCE -GUYANA’S RESOURCE DILEMMA

Guyana, Mineral- Resources, RUSAL ,BOSAI, Trotman, Workers, Strike, Union, Resource

The abuse of public office for private gain is a political pandemic native to resource- rich countries that meet and surpass the Transparency International threshold for corrupt governance.

That’s the kinder introduction to the rape of Guyana’s natural resources; more particularly its bauxite and now manganese under elected government – as opposed to militarized dictatorships where the behavior is more expected.

It could be argued that enough is not known by the rightful beneficiaries of this patrimony – Guyanese – of how vital their country’s resources are to the world and how they could use it as leverage to attract better investment.

But the argument has more standing and more practical application when global ethics are examined; when we ask, how come bodies like the United Nations don’t do enough to sanction trade in resources that are extracted from comparatively unsophisticated countries; on dubious contracts drafted by preying on the moral underbelly of those fueled by bribe and unfazed by political dereliction.

There’s reason for alarm when Finance Ministers explain budgets as complex multi- layered transactions –with a concurrent inexplicable flow of wealth into the capital accounts of those who create the financial maze…as occurred, as a matter of course, under the PPP.

It can be argued that Imperialism has been resurrected -or revived (for the more optimistic) through globalization and its generous outlay to countries that are poor in capital and rich and resources.

This may be true, for there is an insidious side to this modern-day imperialism which chooses to speak the language of large down payments to politicians whose characters are assessed by their country’s rank on the International Corruption Index.

So,they package their subversion in parcels of diplomacy and development…the softer approach to destabilization with battle ships and bloodshed…  by offering cash -strapped countries low-interest loans with relative ease, as they ease further in to the country’s mineral wealth…acquiring more and more mining rights as they go because the contracts are hardwired for corruption.

This may explain how Russia got in to places like Linden, Kwakwani, and Ituni, when they were not even part of the Colonizers Club…the British the French and the Dutch.

RusAl’s big gun is an international multi billionaire, rogue and scoundrel named Oleg Deripaska – whose Law-Enforcement profile reveals that he is wanted for a variety of high crimes and multiple misdemeanors in several continents. He is bosom buddy/financier to Vladimir Putin – Russia’s President/KGB Head/Charmer and Brutal Executioner, where people who offend the state just become dead or mortally pending.

Russia reputedly holds about thirty five percent of the world’s reserves in mineral deposits, but the bigger portion of this sits in Siberia – which is known more as a penitentiary for offenders of the state than it is as the holder of its mineral wealth because it is so unforgivingly cold and eerily inarable. So, it’s cheaper for Putin to get mineral wealth from countries in Africa and South America, where politicians typically come in user-friendly mode.

And, the South American location has added benefits, too.

It comes with geo-political standing.  It offers Russia opportunity to extend its economic tentacles and compete with China and India and Malaysia and the West for proprietorship of the resources of needy countries by ensuring that development help would employ Russians in key and critical areas, thereby, thwarting real technology transfer to the local resource center. It’s not a novel choke-hold.  It’s the strategic economic strangulation employed by China, India and Malaysia who did it, too, through Bai Shan Lin, Vaitarna and Barama, respectively.

So, Guyana came with bona fides for its negotiating- naiveté and accessibility to its politicians through the language of currency and creative accounting which under-valued concessions, over-priced capitals and re-directed that difference to politicians whose salaries remain irreconcilable with their wealth.

It was small wonder that Oleg rode in to Guyana in 2003, unleashed his charm –offensive on Jagdeo et al and promised a phased study of USD 10 million value, to determine whether a bauxite plant could be constructed. If so, then he would invest USD 1 billion and create thousands of jobs, build access roads and even transfer some technology.

Guyana was sucked in to this predatorial scam through a company called RusAl (Russia Aluminum) owned by a crook called Oleg Deripaska whose Rusal has a history as speckled as his. Paying the occasional bribe is captured in his accounting ledger under ‘other’. There is also historic documentation of his company’s engagement in transactions that are well below board, exploitative and morally questionable.

It’s necessary to mention this because one would think that a government’s stewardship of the people’s resources would force it to do – yes, due diligence which should exclude a company with a CEO and resume like Oleg’s.

But, they didn’t, so Oleg got in and then established a web site that was a fore teller, if there ever was one.

The Dickensian “Best of times worst of times worst of times” anaphoric greets us on the ‘History’ page … a welcome that may strike most as a strangely ominous choice for a page that details the genesis of a company. And its preference for broad references where specifics would be acutely more informative, sort of, comes across like a nice swath of hollowness.

The lack of timely and reliable information on how this deal was inked gives rise to suspicions that the negotiation was largely Oleg’s domain. As the steward of the people’s property, the government had an obligation to make public, the geologists and engineers who did the assessments to determine recovery rates and metering and the financial specialists who determined the flow of revenue. And the policy documents on how the government would have treated communities and their environs should have been released, as well.

Both Jagdeo and Ramotar have taken victory laps for the revitalization of Guyana’s bauxite industry. What they’re yet to take is the blame for contracts that didn’t live up to obligations, contracts that took away more than they delivered.

And the country is not only beholden to Russia through RusAl.

There’s Bosai Mineral’s, Guyana – a Chinese company with soft loans and hard imperialist ambitions. As the benefactors of contracts which seem to flex only in their favor, they, too, have left a trail of damaged roads, unpaid bills and union violations. They, too, have been granted concessions to harvest bauxite, in contracts that have demonstrably been of more benefit to their business than to Guyana.

And, more recently, this Bosai, under this new Coalition Government Administration, has been granted a resource contract to take over the manganese mining in the North West District under the guise of creating –drum roll- some four hundred jobs…a striking decision given its propensity to shatter contractual agreements.

The motives for Russia and China’s presence in the region are both economic and political and have to be examined in the wider context of their overall foreign policy, their craving for superpower status and the geo-politics of the current global conjuncture.

The current local juncture, though, is that there is a new government in place, one that was popularly elected on a platform of revisiting contracts made by the previous government which, irrefutably, failed to fulfill agreements, particularly those impacting patrimonial assets.

Current Headlines constantly inform that this Coalition Government is reassessing the bauxite industry and even hosted a convention that included the input of Dr. Samuel Hinds and Major General, Rtd. Norman Mc Lean, both of whom tend to sully the integrity of any strategizing on improving the extractive resource industry.

Those who follow these things will remember that Hinds was Oleg’s point person during the conception of RusAl Guyana in 2003 and would argue if he had anything gainful to contribute to the correction of the course of the country’s bauxite, he had ample time to do it over the twenty years he was his Party’s resident expert on all things bauxite.

Mc Lean…well, there are just things he does to anything, by mere process of osmosis. But to be fair and not lump all of his integrity into one cauldron, Demerara Waves did cover a story in its March 12th 2012 print of a public meeting at which he and Robert Persaud were the bearer of good news from the PPP; at which he, McLean, touted the establishment of a third kiln and at which he used industry terminology like proppants and mullites to show his dexterity in an industry he has only political knowledge of.

The question here is, why would an Administration, this new Coalition Government, purporting to fix a problem, employ the input of those who created the problem? No paradox or proverb here; just a puzzle which creates fear that the current contracts of RusAl and Bosai will remain firmly in place with this Coalition Administration.

The model created by these contracts has, already and for an extended period, manifested its negative social, environmental, financial, and institutional impacts. These contracts are exploitative and contribute to bad public policies and bad quality of public spending. On those issues alone, they should be renegotiated with structured immediacy.

Guyana’s natural resource wealth has been captured by an unaccountable few. The good news is that the situation is reversible so Politicians should be negotiating from a platform of leverage.

People, typically, don’t look at an aluminum container or a soda can and think of how they were made possible. They don’t think that their soda can is made of aluminum with 1.5% manganese to prevent corrosion so that they could enjoy the carbonated concoction without the perils of rust; or that their foil container is made from alumina which is derived from aluminum which is derived from bauxite.

Guyana boasts reserves of both of these minerals!

Guyana is an extractive – rich country with new resources burgeoning on its horizon. The country has already fallen victim to dollar diplomacy. Broken contracts and disrespect of Guyanese nationals are a direct result of the toxic combination of little public monitoring and errant politicians pursuing an agenda that excludes the majority.

This new Administration, this Coalition Government, is well aware of that because correcting this disrespect and abuse of Guyanese by foreigners was one of its winning selling points during its campaign and it’s enshrined in its Manifesto.

Since its accession to office, this Coalition Government has been promising to address the extractive resource industry, hosting multiple reviews and symposia on the issue.

But the facts are clear.

There was a leadership- deficit in the twenty years preceding this new ‘look at the industry’, as is evidenced in the country’s ranking on every existing social and political index.

Beginning from the premise that every contract pertaining to extractive resources was solidified by venal politicians and foreign investors whose minds were on profit for themselves and not the toiling masses of Guyana, therefore, is a common sense starting point. And exercise the country’s leverage. Apart from their geopolitical ambitions, Russia and China want Guyana’s bauxite because of its quality and the fact that it is extracted in a comparatively stable political environment and not in that of anti-imperial activism that roils some of its source countries. This simple truth is a formidable negotiating crowbar.

It’s now been more than two years.

Political enthusiasm for this Coalition Government was replaced by disappointment

Suspicion then became its fierce rival.

People continue to look to their elected leaders for some reassurance…

…and all they’re getting are furrowed brows and stroked chins.

 

 

 

 

 

 

Bauxite sector instrumental in Guyana’s economy – Minister Raphael Trotman

http://parliament.gov.gy/media-centre/speeches/budget-speech-dr-roopnarine-2014/#.WSW85evyvct

 

RUSAL SNUB – RUSAL ditches meeting with gov’t and bauxite workers’ union

Canadian bauxite firm bypasses Guyana for US$200M processing plant

 

Norway team ‘horrified’ at bauxite mining in pilot village Muritaro

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