Sat | Aug 19, 2017

Editorial: Corruption stalks petroleum trade

Published:Thursday | December 31, 2015 | 12:00 AM

Jamaica's petroleum industry has been jolted by the unravelling of a web of conspiracy and corruption that appears to be widespread and entrenched, threatening public confidence in the key ingredient of private and public transportation.

It is an open secret that the fuel trade has peripheral players who operate parallel illegal enterprises that skim off supplies and effectively run a black market. Their ready recruits siphon off gasolene and pocket millions of dollars that, wittingly or unwittingly, fall beneath the radar of regulatory authorities. Yet these criminal networks often operate in plain sight that could hardly escape the scrutiny of the police.

But the report into the bad gas scandal, the extent of which is still being assessed, reveals that what was presumed to be a gritty underworld has seamlessly been integrated into the formal sector and that there is mass complicity which may run from the bottom to stakeholders high up the chain of supply. There are, allegedly, illegal mixing stations at which gasolene is either diluted or jeopardised with substandard stuff and then distributed. It would be naive to think that all the operators and staff of service stations would be ignorant victims.

 

tentacles of deception

We urge the Major Organised Crime and Anti-Corruption Agency to expeditiously investigate the fuel scam to determine how expansive, and how deep, the tentacles of deception reach, which clearly involves tanker drivers and other shadowy middlemen, and, more important, whether the trail leads to any of the marketing companies and the state refinery Petrojam.

The Bureau of Standards Jamaica, the regulator of quality in the fuel trade, ordered the closure of 17 service stations, effective midnight Tuesday, in an initial wave of what transport operators, business people and motorists in general fear could be a tsunami. Scores, if not hundreds, of motorists have howled about the alleged dysfunction wrought on their vehicles by substandard gasolene, costing, individually, tens of thousands of dollars, often without resolution.

The danger is that company fleets could be ground to a halt and private motorists, who have little cushion against wipeout, would be even more vulnerable. And though the State may encourage victims of the defective fuel to mount lawsuits, that may be cold comfort, as the drivers would have to provide receipts and it may be difficult, nigh impossible, to prove that culpability of a particular service station. It is also too early to establish whether such stations would bear liability if the problem's source was traced higher up.

 

planned policy initiatives

Phillip Paulwell, the energy minister, has sought to temper panic by disclosing that Cabinet has approved legislative amendments aimed at tightening the reins and imposing stiffer penalties on offenders. Other planned policy initiatives include the installation of tracking devices for adherence to routes, and for improved checks along the entire chain of supply. But that won't be nearly enough.

Minister Paulwell may well consider a panel of highly respected professionals from civil society, business and other spheres to engineer a review, and overhaul, of the fuel industry and to restore public confidence in what is really an essential service. The years-long squabble of alleged manipulation and subterfuge by marketing companies could well fall within that purview.

The Economic Programme Oversight Committee and the Electricity Sector Enterprise Team provide proven examples of how the State can benefit from the sagacity, balance and impartiality of elite thinkers and actors.

Among the reforms that such a council of wise men and women must mull is whether the Bureau of Standards has the sufficient institutional capacity to properly monitor the sector and what adjustments ought to be made to bridge the yawning gaps. This is at least the third time in a year that the bureau has been caught napping. Its failure, till recently, to recognise a booming and unapproved bag water industry, and its sloth in allowing the supply of below-par building block sector to mushroom out of control, signal that a shake-up, or budgetary reinforcement, or both, is needed.

The Bureau of Standards must emerge from its slumber. It cannot keep reacting long after the horse has bolted. That's a standard that can't be tolerated.