The People’s Progressive Party/ Civic Government (PPP/C) Government has proposed four oversight mechanisms to be part of the main governance structure of the Natural Resources Fund (NRF) which will hold the country’s royalties and profit oil revenue.
According to the NRF amendments tabled on Thursday by Senior Finance Minister within the Office of the President, Dr. Ashni Singh, the government proposes to have as its leading controller, a Board of Directors which will assist its two other mechanisms, being the Investment Committee and Bank of Guyana, in their respective roles.
Guyana Standard understands that the members of the Board will be appointed by the President. The draft legislation states that the Board of Directors shall comprise of not less than three and not more than five persons who shall be appointed by the President, and one of whom shall be appointed Chairperson by the President.
The amended Bill proposes that the directors be selected from among persons who have wide experience and ability in legal, financial, business, or administrative matters. It was noted that one of the Board members shall be nominated by the National Assembly along with one from the private sector. The Bill states that the Directors shall be appointed for a period not exceeding two and shall be eligible for reappointment.
It is being proposed that the appointment of the Directors and every change in appointment shall be published in the Gazette, on the website of ministry, and in two daily newspapers circulating in Guyana.
With respect to its functions, it is being proposed that the Board be responsible for the overall management of the Fund, reviewing and approving policies of the Fund, monitoring the performance of the Fund, ensuring compliance with approved policies, exerting general oversight of all aspects of operations, and ensuring the Fund is managed in compliance with the Act and other applicable laws.
Furthermore, the Board would also be responsible for preparing the Investment mandate. It was noted that when preparing or amending the mandate, the Board would have to seek the advice of the Investment Committee, be assisted by the Senior Investment Advisor and Analyst of the Fund, and enter into an operational agreement with the Central Bank for the operational management of the fund.
Apart from the Board, there would also be an Investment Committee which shall have seven members who are appointed by the Minister. They will include nominees from the Minister of Finance, Minister in charge of the oil sector, the Attorney General, Leader of the Opposition, the Private Sector, and two ex officio non-voting members: the Senior Investment Advisor and Analyst and a nominee from the Governor of Bank of Guyana.
The Committee would be required to take account of the current conditions, opportunities, and constraints in the relevant financial matters, the principle of financial diversification to maximize risk-adjusted financial returns and take into account the capacity of the institutions involved in the management of the fund and the nation’s ability to bear financial risk.
Another key committee that would be part of the governance structure is the Public Accountability and Oversight Committee. Some sections of the media had reported Vice President, Dr. Bharrat Jagdeo as saying this 22 member body would not be preserved in the amended law since such a high number of persons would make it nearly impossible to run the fund.
Based on the amendments, the government has kept a revised version of the body which includes nine members, all of whom will be appointed by the President. They will include one nominee from the National Assembly, two from the private sector, two from organized labour, one from the professions, and three from the religious community.
The amended legislation is expected to be debated and passed before year-end.