Friday, July 18, 2008

The granting of concessionary arrangements to investors must be done in accordance with existing laws

The granting of concessionary arrangements to investors must be done in accordance with existing laws
Stabroek News letter. Friday 18 July 2008

Dear Editor,

I refer to Mr Christopher Ram’s Business Page commentary published in SN of June 29, 2008, on the concessions which the government purported to grant to Queen’s Atlantic Investment Inc. Mr Ram had timely brought to the attention of the Guyanese public that some of the concessions to be enjoyed by the prospective investor were not authorized by the enjoyed laws. The statement issued by the Ministry of Finance subsequent to Mr Ram’s disclosure concedes that the existing law does not authorize the granting of some of the concessions intended to be granted to the prospective investor QAII and, therefore, confirms Mr. Ram’s observations. This admission by the Ministry of Finance certainly raises the issue as to the governmental functionaries who were responsible for processing the application of QAII and their default in not ensuring that the concessions intended to be granted by the government to QAII complied with the existing law.

It will be recalled by keen observers that the Fiscal Enactments (Amendment) (No.2) Act 2003 was so structured with the intention of providing for some consistency, predictability and transparency in the granting of pioneering concessions. One is compelled to ask the reason for the secrecy surrounding these concessionary arrangements particularly in the light of the obligation of the Minister of Finance under section 37 of the Investment Act 2004 to publish in the official Gazette information relating to the public grant of fiscal incentives and thereby make disclosures of these concessionary arrangements. Similar criticisms have been levelled at the negotiations being conducted with respect to the Marriott Hotel.

The explanations emanating from the government give the impression that negotiations with prospective investors have been taking place without careful consideration being given to the existing laws. To their credit, the opposition parties in the National Assembly have demonstrated that they are fully aware of the lapse on the part of the government thereby making it necessary in this case, involving QAII for the government to take corrective action by means of making legislative amendments.

The need for the early enactment of Freedom of Access to Information legislation is evident. The concessionary arrangements negotiated with respect to the construction of the Marriott Hotel are another example of unwarranted secrecy. What can be the special circumstances in Guyana, as compared with other countries, for stalling or preventing the enactment of this desirable piece of legislation for Guyana?

The explanation by the Ministry of Finance that the law as enacted does not properly reflect the intention of the Cabinet in relation to fiscal incentives seems incredible when one considers the number of governmental functionaries who must be directly involved in ensuring that the grant of fiscal concessions complies with the existing law.

The position must surely be that the granting of concessionary arrangements to investors must be done in accordance with existing laws. If none of the governmental functionaries noticed that the existing legislation did not provide for all of the concessions which the government intended to grant to QAII, then our system of checks and balances which was carefully crafted to avoid just such a contretemps, has not fulfilled its purpose.

Yours faithfully,
Brynmor Pollard SC

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