Sen. Burke concerned about implications of GPG agreement

“This is an act of cowardice.”

Those were the words used by Political Leader of the main opposition National Democratic Congress (NDC), Sen. Nazim Burke to describe moves by government senators to block his contribution to the debate on the Hydrocarbon Exploration Incentive Bill during last week Tuesday’s sitting of the Upper House of Parliament.

NDC Political Leader Sen. Nazim Burke discloses documents to support his arguments

The Bill seeks to provide incentives for businesses that are interested in exploring for oil and gas in Grenadian waters, including customs duties, Value Added Tax (VAT) and National Insurance Scheme (NIS) and income tax exemptions.

During the debate on the bill in the Upper House of Parliament, Sen. Burke sought to provide some background information pertaining to an agreement signed by the then and current Communication, Works and Public Utilities Minister, Gregory Bowen on March 31, 2008, ahead of the 2008 general elections, with Russian oil and gas explorers, the Global Petroleum Group (GPG).

However, the Congress leader was blocked from making his points, which he felt were relevant to the debate on the Bill.

As a result, the irate Senator chose to walk out of the sitting in protest against the decision of Senate President Chester Humphrey, who agreed with arguments put forward by senators on the government side that Sen. Burke’s contributions were irrelevant to the proceedings.

The Congress leader immediately called an emergency press conference at the NDC headquarters in St. George’s to vent his concern with the March 2008 GPG agreement to the Grenadian public.

Sen. Burke pointed to the June 1 national address by Prime Minister Dr. Keith Mitchell, which indicated that within “one or two months the Global Petroleum Group was going to be starting a drilling campaign for oil and gas in Grenada’s waters.

He felt that “if we (law makers) are going to as a parliament discuss and evaluate and debate as a parliament, the sufficiency of this package of incentives it was important to look at the agreement itself, which underlines the (incentive) package itself.

Farmers Representative, Sen. Keith Clouden shows stands in solidarity with Sen. Burke

Sen. Burke is of the view that “the agreement itself may warrant the government to re-engage the GPG to see if we can negotiate for better terms in much the same way that they should have engaged Grenlec to see if they can negotiate for better terms”.

“And that was our argument that it (the background information on GPG) was very relevant to look at the agreement, which is informing the government’s decision to put this law in place,” Sen. Burke said.

He stated that the “general principle is that if as a government you sign a commercial contract with a commercial entity and you believe for some reason the contract that you sign may not have been the most beneficial to you then you must negotiate before you legislate”.

He went on: “Because if you simply decide to pull out the big stick and legislate, you may end up having to find hundreds of millions of dollars to solve the problem and I believe that is where we are standing on the brink right now with Grenlec.”

According to Sen. Burke, his pronouncements should not be seen as an attack on GPG but an “attempt to avoid the tragedy of this agreement” signed with the Russian outfit.

He noted that the government has not told the people the terms and conditions of the agreement, how Grenada stands to benefit from it, the downsides and the risks for the country in entering the agreement.

The NDC leader asked the question, “Could we have done a better deal, have we satisfied ourselves that experts have looked at this deal and (that) it stands to benefit Grenada?”

“These are all issues that ought to be examined that have not been examined,” he said.
The opposing senator was not in a position to provide much details as to the content of the agreement, however, he touched on one aspect, which provides for GPG to deposit USD2.5 million into a bank account in Grenada by a certain date as evidence that they have the money and can undertake a project of this nature.

“In general, this agreement said that the money (has) to go into the bank account of the Government of Grenada and later on after you (the investor) has deposited that money you may be able to replace that deposit with some other form of guarantee that the government can have as security or access in the event that you (the investor) remove the USD2.5M out of the account,” he remarked.

However, the Congress leader said, the monies were never put into the government’s bank account.

“In fact the money went to a bank in one of the Russian Federation countries and the company went to a bank and got a letter saying that the principal, not the company, the main man in the company has money and therefore they don’t need to put the USD2.5M into the account” he told reporters.

“So the monies were never put into the bank account and that’s just one of the provisions in the agreement, he quipped.

Sen. Burke also spoke of another provision in the agreement, which speaks of “the setting up of a committee to advise the Grenada government on how to implement the GPG agreement.”
He charged that the “committee was set up comprising six persons three from the GPG itself and three from the government.”

“In other words, the people that you are entering the deal with are the same people that are on the advisory committee advising you what to do (in) Grenada’s best interest,” he said.

Sen. Burke also referenced the former agreement signed with Texas-based RSM Production Corporation, which provided for a 4-year oil and gas exploration period at US$19, 000 for a yearly license.

That deal eventually went sour and RSM President and Chief Executive Officer (CEO) Jack Grynberg took the government of Grenada before the International Center for the Settlement of the Investment Dispute (ICSID) to resolve the matter.

Sen. Burke recalled that the government of Grenada entered the GPG agreement while the RSM saga was still before arbitration.

He also sought to raise this point during the debate on the bill, however, was slammed down by Sen. Humphrey.

“He stopped me saying that I should not talk about it because it is not relevant. But it is relevant; because that is the same agreement that is now under consideration,” the Congress leader said.

The former Finance Minister pointed out that based on the agreement, government is obligated “to give GPG a right over 11 of our maritime blocks.”

Sen Burke said, “These blocks are five and six times the size of a regular block that Trinidad, Venezuela and the other countries are giving.

“So they (government) are giving them the right to explore over five blocks that they (GPG) marked out themselves,” he said, noting that the “government is supposed to mark out the blocks but did not (and) in exchange they (GPG) promised the government that they would pay for the lawsuit of the arbitration that was taking place between Grenada and RSM Corporation.”

Additionally, Sen. Burke said, “it was also agreed that even if the Texas company wins the lawsuit government agreed to still give the Russians the right to explore over the 11 blocks.”

“So you can see that the thing is being set up for confusion from the very beginning,” he added.

The Press conference was also addressed by Sen. Keith Clouden, the farmer’s representative in the Upper House of Parliament who along with Sen. Franka Bernardine joined Sen. Nazim Burke in staging the walk out.
Sen. Clouden expressed the view that Sen. Burke was making “a very healthy discussion” on the bill when the attempt was made to shut him up.

“I felt that the discourse was relevant (to the bill) and as such because of the insistence on the part of the President (Chester Humphrey) that it was not relevant, I felt that I had no other choice but to support Sen. Burke and the other Senator (Franka Bernardine) in staging a walk out.”

Sen. Clouden told reporters that “in every bill there must be background information” given to legislators.

“…I felt that Sen. Burke was not given that opportunity to explain to us and to the nation-at-large what were the implications of that (former) agreement for our country…we were in a business that was at a disadvantage and I could not allow myself to stay in the Senate and see a bill of that sort (being) passed. And not only that, the rights of a Senator to deliberate on an important issue as exploring for gas and oil in our marine territory,” he said.

The Hydrocarbon Exploration Incentive Bill, which was approved by the House of Representatives last month, was passed in the Upper House without amendments.

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