TTEITI Takes Energy Sector Transparency Message to Tobago
The Trinidad and Tobago Extractive Industries Transparency Initiative Steering Committee hosted an outreach event in Tobago at the Magdalena Grand on June 28 to spread awareness on issues related to future energy sector projects for Trinidad and Tobago, plans to identify beneficial owners of companies and practical uses of EITI data. Several speakers shared their insight including Victor Hart, Chair, TTEITI Steering Committee and Member, EITI International Board, Keegan Bharath, TTEITI Youth Ambassador, Bertrand Bhikarry, Environmentalist and Sherwin Long, Head, TTEITI Secretariat. Minister of Energy and Energy Industries Nicole Olivierre delivered the feature address at the event and the following is an excerpt from her address:
Last September, at the launch of the latest EITI report, I promised then to visit communities and help spread the word on the benefits of the EITI. I am therefore heartened and honoured to address you today in Tobago. Like many citizens of our twin-island republic, Tobago is a sanctuary for me. A place where clean, green, safe and serene is more than just a catch phrase, a place where you can peacefully reflect on the present and future. As Minister of Energy, I also acknowledge the important role Tobago will play in the country’s deepwater energy future and our diversification strategy. I intend to be open and frank on these matters. Too often, issues around our plans for the energy industry appear to be clouded in secrecy.
Fortunately, this Government will always remain committed to transparency and sound governance of our extractive sectors. And, by supporting EITI implementation we are living up to our word. We will throw our support behind any initiative that strengthens transparency around energy and mining revenues in the country. And, the EITI, is the global gold standard for resource revenue transparency. Our EITI Reports help unearth critical information on taxes paid by extractive companies that were not previously available in the public domain. It also offers valuable contextual information on our extractive sectors and helps citizens to better understand these sectors that are the cornerstone of our national economy. Importantly, the EITI Report also shows that Government, companies and civil society can work together towards a common cause – in this case, transparency around just how much we receive from companies operating in the extractive sectors whether oil, gas or mining.
But the EITI is more than just an accounting exercise as it can help us start a conversation about long term reform and link us to global transparency best practice. One example is in the area of beneficial ownership. As highlighted earlier, the identity of the real owners or the ‘beneficial owners’ of the companies that have won the rights to extract oil, gas and minerals is often a mystery, hidden by a string of unaccountable corporate entities. This problem often helps to nurture corruption and tax evasion. According to a report by the ONE organisation, it has been estimated that developing countries lose USD 1 trillion each year as a result of corrupt or illegal deals, many of which involve anonymous companies. While this problem has not yet plagued Trinidad and Tobago, vigilance is still the key. With the Panama Papers exposé, we saw the possibilities for financial secrecy and the facilitation of corruption and tax dodging. Better rules and enforcement here will protect us from adding to this chapter of corruption.
Only last month, at the Global Anti-Corruption Summit, our Prime Minister pledged this country will establish a registry of company beneficial ownership information. He also committed to ensuring that law enforcement agencies have full and effective access to this beneficial ownership information for those companies and other legal entities registered within our jurisdiction.
Going further, he stated and I quote “Trinidad and Tobago is open to implementing bilateral arrangements that will ensure law enforcement in Trinidad and Tobago have full and effective access to the beneficial ownership information of companies incorporated in other countries who are willing to share such information with us. Trinidad and Tobago is prepared to provide full and effective access to the beneficial ownership information of companies incorporated in Trinidad and Tobago to other partner countries.”
Given the priority the Prime Minister and Government is now giving to beneficial ownership disclosure, I am pleased to find out that the TTEITI Steering Committee is one step away from publishing the country’s first beneficial ownership register for the oil and gas sector. I am certain the Government can collaborate and capture learnings as we embark on a journey to publish a national register to highlight the real owners of all companies operating here. Tax evasion and hidden ownership causes leakages and erodes fair play in a country’s financial system and we must avoid this through putting the correct systems in place. With these beneficial ownership projects we are on the right track.
Trinidad and Tobago’s Energy Future
Projects to increase transparency will always be welcome but given the precipitous decline in the price of energy commodities, keeping an eye on revenue from the extractive sectors is also an important and necessary exercise. Planning and having a vision for the sector is paramount. Our Government has many policy questions to answer and solve. How do we ensure continuous investment in the sector? How do we improve security of gas supply for our gas-based industries? How do we revitalize oil production? Which countries do we seek strategic partnerships with? Do we transition to a green economy? How do we prepare for the development of our deep-water acreage? The deep-water is seen by many as the next frontier for Trinidad and Tobago’s energy sector.
Only last month BHP Billiton began its deep-water exploration drilling campaign when it spudded its Le Clerc-1 well in Block 5 in 5,900 feet of water. Le Clerc-1 is the first of a two-to-three-well Phase 1 campaign that is expected to take approximately nine months. This historic drilling campaign is being conducted by the Deep-water Invictus, a state of the art 7th generation drill-ship which can drill in water depths of up to 40,000 feet. While the Le Clerc-1 well is in the company’s southern acreage offshore Trinidad and Tobago, the second and potentially third wells will be in the company’s northern acreage offshore Trinidad and Tobago. Based on its contractual obligations with the Government of Trinidad and Tobago, BHP Billiton is obligated to drill eight wells across its northern and southern acreage. This exploration campaign is expected to cost BHP Billiton and its joint venture partners approximately USD 1 billion.
You may look at the scale of this investment, the work being undertaken and wonder about the potential negative impacts for Tobago. I know it is a real concern. But fear not. Many of you here may ponder how do we develop industry in or around Tobago yet respect and protect our environment? The answer is with leadership and the ability to strike a balance between industrial development, conservation and proper regulation. This country has a storied history of oil and gas development, stretching back over a century, with only one major oil spill recorded. Given this recent negative experience, this government is even more mindful of the need to strike this balance and ensure that best practices in rehabilitation and environmental management are the norm and that value is created in a socially and environmentally sustainable way from our finite mineral resources. As I said before, fear not. We can and we intend to strike this balance and we can do it by partnering with business. By empowering communities with knowledge and not shielding information from them, by giving our regulators the correct tools to fulfill their mandates. The stakes are high but we pledge to ensure any development does not alter the unique Tobago landscape.