Mr. Adam Harris
I would like to respond to article, “Natural Resource Fund Bill Riddled with Loopholes for risky Investment” which was published in the online edition of Kaieteur News of 5 January, 2019 (https://www.kaieteurnewsonline.com/2019/01/05/natural-resource-fund-bill-riddled-with-loopholes-for-risky-investment/).
In that article, reference was made to the passage of the Natural Resource Fund Bill in the National Assembly, on Thursday, January 03, 2019. In particular, it was stated that the Bill was passed with no changes made to the flaws highlighted by international and local transparency advocates. Contrary to this piece of misinformation, the Bill, which was laid in the National Assembly on 19 November, 2018 underwent substantial revision to incorporate many comments received from local and international individuals and organisations, including the Natural Resource Governance Institute (NRGI). Had you taken the time to review the Bill that was passed in the National Assembly, prior to rushing to the press, you would have realized that many of the relevant comments made by the NRGI on the Green Paper were actually addressed in the Bill.
For example, the Bill clearly limits investments to certain assets. This is articulated in Section 31, where there is a detailed list and criteria for eligible asset classes to which investments of the Natural Resource Fund are limited. Additionally, the Fund will be invested according to the principle of passive investment management (Section 35), which means that investments shall be made to track certain indices. In these ways, the Bill clearly limits investments to certain assets. Additionally, Schedule Two of the Bill sets ceilings and floors for investments in various asset classes, which limits the riskiness of investments. The Investment Mandate, which would include instructions on investments must, also, would include directions relating to the management of market and other financial risks, as stated in Section 36 of the Bill.
The newspaper article also erroneously stated that the Bill does not require reporting on all assets financed by the NRF. In the annual report of the Fund, the Bill mandates that the report include the market value for each individual eligible bank deposit, eligible Treasury bill, eligible sovereign bond, eligible corporate bond, eligible equity, eligible commodity and eligible derivative held by the Fund. This is included in Section 41 of the Bill, and Section 42 requires that this report be published on the Ministry’s website.
This landmark piece of legislation has been favourably received by many local and international experts and organisations, contrary to what was published in your newspaper. I note, however, your attempts to be less caustic with your commentary, as evidenced by your quoting extensively from comments made by the Commonwealth Secretariat Adviser (See “Natural Resource Fund Bill not perfect”, Kaieteur News, January 07, 2019, p 8). While the Ministry of Finance will continue its engagement with the public on the legislation, the media are asked to play their roles as educators and purveyors of truth and accuracy. I encourage all interested persons to download and read the Natural Resource Fund legislation, which can be found at www.finance.gov.gy.
Minister of Finance