Dear Editor,
I write in response to (Elder) Hamilton Green and WPA calling for (supporting) a referendum on renegotiation of the Exxon contract. Referendum is and should be held on matters relating to how we are governed and on critically important national interest issues. Only once did Guyana have a referendum – in July 1978 and it was rigged in order to create the Burnham constitution which Green enthusiastically supported. The idea of referendum is endorsed as it empowers the public. Referenda are known to have been held on varied issues globally but hardly any on business investments and contracts and certainly none on revisiting contracts. Involving the people in decision making via a referenda is laudable, but can it legally force (coerce) a private entity to the negotiating table after a contract is signed? Will Exxon CEO Alistair Routledge and the company agree to renegotiation?
The Exxon matter is not a constitutional issue on governance but relates to investment and contracts between the state and a private business. It is an economic issue that was negotiated in good faith. At least that is what was presented in public by the then government. It is uncertain how the contract can be revisited as both the government and opposition say that there is a clause in the contract that protects its sanctity. Both publicly stated they are opposed to violating a business agreement. Government and or politicians have access to greater information than the public on international business agreements and consequences on violation them. Without their parliamentary approval, a referendum cannot be held. Can renegotiation successfully be done via a referendum?
A (majority yes) referendum could force the state to act, but can a referenda (majority vote yes) compel a private entity to make a business decision against its interest (profits or dividends)? A state or the public cannot instruct a private entity how to conduct its business. The entity can and should be regulated, but the state cannot get involved in its decision making once an agreement has been reached. Such high-handed actions exist in communist nations. Guyana moved away from communism since the late 1980s. Communism failed everywhere to improve lives of people.
The call for a referendum on Exxon should have been made by Mr Green when the agreement was first drafted and presented to the then coalition government and the parliament for approval some eight years ago. There were public objections to the agreement at the time. But the government signed it nevertheless.
Businesses or investors enter into agreements so they would know their projected costs and expenses and whether investments are financially worthwhile. They make policy decisions based on agreements or contracts and not on spur of the moment policies of governments. Families similarly plan their budgets. Families and businesses can’t simply and easily alter business plans based on capricious feelings or policies of government. They plan their operations based on projected expenses (investments) and earnings.
Can government legally revisit an agreement some eight years after the fact? The government should not break or violate treaties or agreements. The implications of violating a contract are too many on investment. Government should look at other avenues or means to increase benefits to the nation inclusive of job training and employment opportunities or accrue additional revenues from the energy industry without violating contracts.
Yours faithfully,
Vishnu Bisram
