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THE ELEPHANT IN PETROTRIN’S ROOM By David Walker

posted 9 Oct 2018, 08:01 by Gerry Kangalee   [ updated 9 Oct 2018, 09:06 ]
It was recently reported that Petrobras was hit with a US$ 853 million fine. Petrobras, as it happens, is the Brazilian equivalent of Petrotrin in T&T. The fine was as a result of corrupt activities by the company. It came at the end of a long investigation into widespread corruption at the company. That investigation was code named Car Wash and started several years ago as a result of the discovery of bribery and other corrupt acts at one of its gas stations.

From there the investigation’s tentacles reached deep into all levels of the company bringing some powerful players to their knees. For example it was stated that Petrobras’ “former director of refining and supply, Paulo Roberto Costa, who named many of those implicated in the widening corruption scandal in a plea bargain deal with prosecutors, was sentenced to 7 years and 6 months in prison.”

Another report said that “Jorge Zelada, who ran Petrobras's international division, was convicted of money-laundering and corruption. Another Petrobras manager, Eduardo Costa Musa, and two others were also jailed. The men were paid millions of dollars in bribes by a Petrobras contractor. The investigation also found that Jorge Zelada had transferred huge amounts of money offshore into bank accounts he owned in China”.

How likely is it that corruption existed at that scale in Brazil and not in T&T? We have a situation where we are told that twelve billion dollars have been spent by our directors with the consent of Cabinet and that what we have obtained for it is of no value whatsoever and would not be acquired by any third party, according to Chairman Espinet. Twelve billion dollars for absolutely nothing and we hear only silence about corrupt practices. There is not even talk of an investigation or inquiry.

Consider as well the contrast with regard to who suffers for this malpractice. In Brazil, the directors, senior managers and high ranking 
Image result for operation car washpoliticians go to jail. In T&T the workers get to go home. I absolutely do not believe that this is right nor do I believe that this course of action will do anything other than encourage continuing corrupt practices in the state sector. This is a green light to all corrupt individuals in the system to carry on as before.

It is true that legal action had been commenced against Malcolm Jones for his role in the horrendous losses that we now suffer. Sadly, and without explanation, that legal action was stopped by this administration. Not only did we lose any prospect of having someone take responsibility for these losses, we were also denied the opportunity to hear the evidence of what transpired with regard to the failed contracts. We absolutely need to know how such disastrous events could have occurred, not once but thrice.

By terminating the legal action, this administration has denied us the one ray of light that was being shone on the events and activities at Petrotrin. Accountability for the waste of twelve billion dollars came to an abrupt end. Yet one small hope remained. Since Petrotrin is a state owned enterprise we could always rely on the report of the Auditor General Department and the questioning of officers by the Public Enterprises Accounts Committee (PEAC).

You can speculate as to whether it is intended or unintended but one likely outcome of the termination of refining operations is that the books will be effectively sealed with little or no further reporting on what has transpired with the expenditure of twelve billion dollars of our public funds. Presumably that will also put an end to examination by PEAC.

The directors and others who brought us to this sorry situation continue to walk tall and without fear. Our leaders are either unwilling or unable to change that reality. We the citizens therefore have to do all within our power to stimulate that discussion and to force a change of approach from this or a future administration.

If it is our position that we do not need to go after those who have abused our trust and that we do not have to take corrective action urgently, then we are doomed to continuing failure. Our only salvation lies in an aggressive and surgical removal of the cancer within the company i.e. corrupt officers and their enablers in government.


Petrotrin's transition team:Chairman Wilfred Espinet; Deputy Chairman Reynold Adjodhasingh, with oversight for Finance and Administration; former BP Trinidad and Tobago CEO Robert Riley, with oversight responsibility for Exploration and Production; former Petrotrin Vice President and current director Anthony Chan Tack, with oversight for Refining and Marketing. 
Such is the depth of the malaise that even the termination of the refinery operations bears many of the hallmarks of a corrupt arrangement. Note that the termination itself is a transaction in public money and should be subject to best procurement practice inclusive of openness and adequate consultation before decisions are made. This termination like so many recent and current transactions in public money is being decided without the benefit of any public consultative process.

The termination is being managed in a way that invites corruption. It is secretive and is devoid of even pretence of consultation. It seeks proposals from prospective bidders, including OWTU, without access to information and with only a few days in which to prepare and present a proposal. One wonders how the authorities are able to say that there is interest from third parties when no information has been made available. Is there a process that we don’t know about? Are there bidders who already have access to data not available to all interested parties?

We need to be diligent. It is clear that corrupt practices have thrived at Petrotrin. It is of great concern that this administration has no plans to deal with such practices. Failure to follow best procurement practice adds to the dangers. It means that having shut down the refinery ostensibly to reduce costs (not corruption), we are left with a closure procedure that is itself beautifully primed for corruption.

Will we ever follow in Petrobras’ footsteps and deal with the elephant in the room?
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