Fri | Apr 19, 2019

Editorial | Petrojam and public trust

Published:Thursday | February 21, 2019 | 12:13 AM

Prime Minister Andrew Holness needs to be alert to the danger of people losing trust in his Government to the point where no one believes, or at least weighs very warily, anything it says. When it gets to that point, it usually matters naught what a government achieves, no matter how good.

The recent controversies over the management of the Petrojam oil refinery, particularly the opaqueness with which the golden parachute it afforded its former human resources director, Yolande Ramharrack, to facilitate her unlamented departure, is a case in point.

Ms Ramharrack was appointed despite not meeting the company’s minimum criterion for the job, but, in very short order, had her salary bumped up by a quarter. Her employment was supported by two separate letters, an approach whose reason remains unexplained. Then, in the midst of a wider and deeper scandal over the management of the refinery, the new governors laid 19 disciplinary charges against Ms Ramharrack but preferred to settle with her rather than proceed with the matter to its conclusion.

The public was told that Ms Ramharrack received a gross settlement of J$9.2 million. It turned out that the actual figure was J$4 million more. We know this only because after his fudge in Parliament on the matter, public pressure forced Prime Minister Holness to reveal all the documents related to the case, notwithstanding the non-disclosure agreement between the parties.

Legislative Action

 

In the midst of the scandal at the refinery over allegations of corruption, nepotism, and cronyism, came the administration’s decision to forcibly reacquire Venezuela’s 49 per cent stake in the plant, claiming that US sanctions on Venezuela made a continuing partnership with Caracas untenable. It was going the route of legislative action in taking back the shares, Jamaica insisted, because of the intransigence of President Nicolás Maduro in reaching a settlement.

It might have been suspicious that Jamaica’s move for the takeover coincided with its vote, joining 18 other countries at the Organization of American States, led by the United States, Mr Maduro’s arch-enemy, to not recognise the Venezuelan leader’s legitimacy because of last year’s disputed presidential vote. However, many would give the administration the benefit of the doubt that its decision with regard to Petrojam was purely economic and not to be conflated with its geopolitical action with regard to Maduro.

But just when it may have been on track in helping people to compartmentalise the two issues, and perhaps having Jamaicans being unsentimental towards Venezuela’s past support under its PetroCaribe oil facility, something again pops up, as happened in Parliament during the debate on the bill for the acquisition of the Petrojam shares, that caused people to question just how straight the administration is being with them or even within its own ranks.

For instance, Fayval Williams, the new energy minister, offered a carefully laid-out case of how, because of Venezuela’s tardiness over several years in tending to the refinery’s upgrade, Petrojam’s value had plummeted from US$128 million in 2006 to US$34 million in 2018. On the latter valuation, Venezuela’s share of the business would be worth US$16.6 million.

But then, opposition parliamentarian Peter Bunting raised the matter of another valuation done in 2017 that reportedly priced Petrojam at US$170 million. Neither Nigel Clarke, the finance minister, nor Minister Williams, Dr Clarke’s former deputy, knew of that valuation. They doubted its existence, only to have it confirmed by Prime Minister Holness.

Mr Holness’ explanation, however, was that the 2017 valuation was on the basis of securitising a US$100-million investment in a vacuum distillation unit at the refinery, which was being considered at the time, and not merely to determine the sale price of the existing asset. That is, perhaps, very logical, but that information ought to have been part of the mix without having to be prised out of the prime minister by the Opposition. Not only was it bad optics, but such an approach doesn’t engender trust.