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The Senate yesterday (Dec. 14) passed a Bill to Amend the Petroleum Act to allow for the establishment of the PetroCaribe Development Fund.
Minister of Foreign Affairs and Foreign Trade, Senator Anthony Hylton, who piloted the Bill, explained that the Fund would be financed from the proceeds of the PetroCaribe agreement between Jamaica and Venezuela.
The resources of the Fund, he said, would be used for “financing approved projects and programmes.to upgrade the social and physical infrastructure of Jamaica and implement projects that impact on the development of the human resources of Jamaica as well as the refinancing of government debt”.
According to Minister Hylton, “the Fund shall be a body corporate, and as such, will operate as an independent entity with its own legal identity”. A board would be established to manage the Fund and to recommend the projects and programmes to be financed.
The board will also have responsibility for investing the resources of the Fund, ensuring that the financial obligations under the PetroCaribe Agreement are met, as well as developing operational procedures for accessing the funds, establishing terms or loans and ensuring that the Fund is sustainable. The Fund will be audited annually.
Leader of Opposition Business, Senator Anthony Johnson, raised concern about the lack of parliamentary oversight of the Fund. He noted that inasmuch as the Fund was intended to improve Jamaica’s infrastructure, its expenditure should be subject to parliamentary scrutiny and approval as was the case with the Capital Development Fund.
“Parliamentary oversight simply means that any such money that is to be spent is spent with the approval of Parliament. It is possible if there is a statutory board with specific duties to administer small amounts, but the amounts that will be administered through this Fund are significant amounts. Not only are they significant, but they have to be paid back in full in a foreign currency,” he noted.
He further suggested that money received under the PetroCaribe Agreement could be lent to a triple A institution, such as the Port Authority of Jamaica, which would yield higher returns than other investments.
Meanwhile, Leader of Government Business, Senator A.J. Nicholson, argued that approvals of expenditure under the Fund should be an executive decision and not a parliamentary one. “What the Senator (Johnson) is asking for is to give to the Parliament the power of the executive.this cannot happen; you would have to change the constitutional arrangements,” he stated.
Senator Trevor Munroe pointed out that the purpose of the amendment was to give Parliament insight into spending under PetroCaribe.
He said the new provisions were “to change the arrangement which hitherto gave the parliament no insight into what was going on,” explaining that prior to the proposed amendments, disbursements were made after deliberations among Cabinet members.
“The method whereby these arrangements and disbursements were made are now being replaced by this Bill and hereafter it will be a different arrangement, removed from the Minister of Finance and placed in a board, the integrity of which will not be challenged by the government or opposition,” he stated.
He further indicated that the appointed board would be obligated to present an income and pre-expenditure budget to Parliament every year.