Reports of the Guyana Gold & Diamond Miners Association (GGDMA) withdrawing from the Multi-stakeholder Group that manages the Guyana Extractive Industries Transparency Initiative (GYEITI) are revealing.
Contrary to the impression given, the GGDMA is not represented on the MSG. It was invited by the Minister of Natural Resources when the GYEITI was informed in 2016 to facilitate the election of someone to represent the interests of small and medium-scale miners. Once the MSG is officially inaugurated the participants are there in an individual capacity. The same applies to the role played by Policy Forum Guyana (PFG) for the civic component of the PFG. (note: GYEITI is the Guyanese section of EITI whose members serve in a voluntary capacity. GYEITI has a small Secretariat that coordinates the work of the MSG.)
Rather than utilize the platform to educate the sector about the advantages of EITI, the member elected from the GGDMA representing all medium and small-scale miners, spent more energy reminding the sector the participation of gold companies in the EITI process is voluntary, not mandatory. The voluntary character of the process is true. What the representative seems to have overlooked to inform miners is that the Government, once committed to the EITI process, must reveal what it received from each company invited to report, regardless of whether the company cooperates.
This distorted information resulted in much consternation among the companies who declined the invitation when the First GYEITI Report revealed information from all the companies invited.
The GGDMA statement reportedly states the GYEITI engages in tracking down “all these small miners harassing them ‘to produce this and explain that ‘. This is untrue. The only companies invited by the independent international auditors contracted to compile the Report were those who had paid G$75million or more to the Government for the year 2017 or over $60 million in 2018, in the form of licensing fees, royalties and other forms of taxation. In 2017 these entities numbered 28, including some who were buyers rather than producers. The rationale for this selection was to focus on the large entities that collectively provided approximately 95% of all revenue in the industry. rather than pursuing the rest of 19,000 odd workers in the sector to find the remaining 5%. The vast majority of the small- and medium-scale miners were not affected at all by EITI procedures.
The GGDMA’s attempt to project the GYEITI as waging war on small and medium-scale miners serves to distract from the more relevant question of how companies who pay more than G$ to -75 million in taxes can be considered ‘small and medium-scale. GYEITI drawing attention to this matter is the more pertinent issue.
The term ‘medium-scale disguises a widespread abuse in the industry whereby miners own licenses covering acreage far in excess of the 1200 acres which defines the difference between ‘large’ and ‘medium-scale mining. By dividing a large area of land into a multiplicity of licenses, the license owner escapes paying the license fees that large-scale mining attracts.
Figures in the 2017 GYEITI Report illustrates how widely this abuse is practised and the losses of millions in terms of hard currency the Government and country loses by it.
Evidence from the 2017 Report shows the largest miner held 228,339 acres divided up into 233 medium-scale permits, much of it contiguous lands, of less than 1200 acres. The EITI Report figures indicate some 329 ‘medium-scale operators engaged in this practice in 2017, the ten largest holding 1,013 million acres under 1,029 medium-scale licenses. By way of comparison, this is almost the size of the island of Trinidad (1,268 million acres).
The systematic registering of large-scale holdings as a multiplicity of smaller holding aims to avoid the higher fee that large scale licenses attract over medium-scale. The loss on each license is the equivalent of USD2.00 per acre per annum which is to be multiplied by the 2,690,552 acres operated by the 329 noted above. This figure should then be multiplied by the decades in which it has been practised, in order to find the true amount defrauded from the people of Guyana.
The GGDMA assertion that the EITI is ’intrusive’ suggests that disposing of Guyana’s publicly-owned natural assets, by private companies at a considerable loss to the State is no one’s business but their own. The EITI is intended to be ‘intrusive’ with respect to the information on transactions in the extractive sector.
It is not EITI’s role or function to pass judgement on the information the process reveals, much less to correct it. The EITI’s only function is to provide transparency about what governments claim to receive and companies claim to pay and between regulations and actual practices. Joining the dots and drawing conclusions remains the responsibility of Guyanese society as a whole.
The Ministry of Natural Resources could facilitate the impasse in the gold sector by inaugurating the new MSG
September 6 2021
FB: Policy Forum Guyana
Tel: (592) 227-4908, 637-2907
c/o Guyana Human Rights Centre, 56B Hadfield Street & Austin Place, Georgetown, Guyana