PETROJAM says it has cleaned up its act, in accordance with the findings of the auditor general’s 2018 report on its operations, which cited the State oil refinery for significant operational, contracts management, procurement and governance weaknesses.

In its 2020/21 annual report, which was laid in the House of Representatives this week, Petrojam’s management noted that, in accordance with the finding, its recruitment practices lacked consistency with internal policies, the human resources sub-committee of the board of the entity has become more active in the recruitment of staff at a certain level to ensure conformity with established policies. “The company’s recruitment practices are currently in keeping with policy guidelines,” the company stressed.In response to the donation policy anomalies which were brought to light by the auditor general, Petrojam says its corporate social responsibility policy, under which the donation policy falls, was redrafted to include guidelines to be used in reviewing requests for charitable contributions and sponsorship.

“In order to qualify for support, due diligence will be conducted to assess the validity of each request, and to ensure that the established checklist of sponsorship/donation criteria are followed,” the management assured.The Winston Watson-led team, while pointing out that, “Oil loss is a standard feature of oil refining industries, by virtue of the nature of the processes involved in converting crude oil into saleable finished products”, also advised that it has moved to stem the level of oil loss in its operations by recommissioning its largest crude storage tank. It has also improved the system for tank draining, and established a system for daily reconciliation of oil movement and storage, along with routine dives to inspect undersea pipelines.The Auditor General’s Department had found unaccountable oil loss of 600,684 barrels valued at $5.2 billion over a five-year period (2013-2018).Auditor General Pamela Monroe Ellis had pointed out a lack of transparency in Petrojam’s discretionary pricing mechanism, due to the absence of minutes of its meetings.Petrojam said the pricing committee, comprising its pricing team, representatives from its portfolio ministry; the Ministry of Finance; and the Office of Utilities Regulation, meets weekly to set prices, and that the minutes are recorded and shared with approved stakeholders.In her 2020 annual report, Monroe Ellis pointed to the efforts being made by the company to improve transparency.There is no indication in the report of activities related to divestment, a suggestion which was put on the table in June 2019 by the Petrojam Review Committee.That committee, which was convened by Prime Minister Andrew Holness to assess the company’s operations, said a long-term lease arrangement was the only path to pursue if the refinery was to remain viable.

Its chairman, Christopher Zacca, had said the committee felt that a Government-run organisation, which is not totally isolated from political decision-making, would have difficulty operating efficiently. “A private sector-run, highly efficient refinery, given the small size of Petrojam (and) the small size of the market, would be the only viable alternative,” he said.At the time, the refinery was mired in a more than year-long corruption and mismanagement scandal. At the height of the imbroglio, the Government took legislation to Parliament to forcibly take back Venezuela’s 49 per cent stake in the refinery. The Government of Jamaica said Venezuela had not kept its end of the bargain for the upgrading of the refinery, under the 2006 joint venture agreement signed between the Petroleum Corporation of Jamaica (PCJ), its subsidiary Petrojam, and PDV Caribe SA — a subsidiary of Venezuela’s State oil refinery PDVSA.