Efforts to recover Petrojam shares start

But PS concerned about governance issues

Senior staff reporter

Friday, April 05, 2019

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Newly appointed permanent secretary in the Ministry of Science, Energy and Technology, Carol Palmer, says that the legislation to retake ownership of the 49 per cent shares in Petrojam held by Venezuela's PDVSA has been in effect since February.

Palmer told the Public Accounts Committee (PAC) of the House of Representatives, yesterday, that the bill, The Compulsory Acquisition (Shares in Petrojam Limited) Act, 2019, which was piloted through the House on February 19 became effective on February 22.

“We are awaiting the expiration of a public notice of anyone who has interest (in the refinery) and may wish to make any claim on it, to determine the final ownership,” she told the committee.

She said that at any moment now the ministry should receive a recommendation from the Accountant General's Department for the composition of the new board under a new regime.

Prime Minister Andrew Holness, who piloted the bill through the House had said that, without an upgrade, Petrojam would be unable to further process heavy fuel oil (HFO) into high-value products, and having lost a major customer in JPS, it would become unprofitable.

He also cited the United States Executive Order 13808 dated August 24, 2017, which essentially prohibits United States persons from entering into specified transactions with the Government of Venezuela and any political division, agency or instrumentality thereof, including Venezuela's PDVSA which he said was affecting the viability of the refinery.

Palmer, however, expressed concern about the accountability framework of the ministry, and told the committee that the ministry was currently implementing a number of proposals from the prime minister related to improving the framework at the refinery, based on the recommendations from the Auditor General's Report on the refinery.

“Yes, we are in the process of implementing all the cabinet decisions relating to improving the accountability framework, and you would appreciate that the minister is now contemplating new boards for these entities,” she said.

“And, so the boards are in a holding position, while we do the due diligence and get information about different things. The minister is on record as saying that she wants a more participatory approach to who sits on the boards,' Palmer said.

Earlier, the permanent secretary had informed the PAC that of 14 entities with boards which fall under the ministry, it only had eight ministry representatives on their boards, and that did not include Petrojam nor its parent company, the Petroleum Corporation of Jamaica (PCJ).

“Efforts are now being made, as we seek to establish new boards, that the situation is regularised, because the ministry will have to have the capacity to be at board meetings, so that we can know what is happening, and also to provide the required reporting to the minister to ensure that the requirements of the law and corporate governance are adhered to,” she explained.

Asked by PAC chairman, Mark Golding, whether this would mean that the ministry would be represented on all 14 boards in the future, Palmer answered, “Absolutely”.

“And also, I intend to make representations to the Ministry of Finance and the Public Service because, it (ministry) does not have an adequate capacity to do the oversight of the entities under its purview,” she noted.

Palmer stated that the Constitution of Jamaica gives the responsibility for administrative arrangements for the portfolio to the minister, and the Public Bodies Management and Accountability Act provides for the boards and the entities, as well as the permanent secretaries, corporate governance arrangements, so there are legal constructs that exist in the public services for proper governance arrangements for efficient government and governance.

“But, what is missing, if I dare say, is where you ensure compliance and you deal with issues of sanctions for failure to comply,” she added.

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