Sat | Jan 4, 2025

Forensic audit for Petrojam ... Key announcements by Holness today

Published:Monday | December 10, 2018 | 12:00 AM
Prime Minister Andrew Holness addressing a press conference at Jamaica House today - Kenyon Hemans

Prime Minister Andrew Holness this morning announced that he has ordered a forensic audit into the $5 billion unaccountable oil losses at the state-owned oil refinery Petrojam.

There has been outrage for the past week since the Auditor General Pamela Monroe Ellis reported that in five years, Petrojam has not been able to account for 600,684 barrels of oil worth $5.2 billion.

It was one of several issues Holness addressed at press conference at Jamaica House this morning.

"Some people have said it's stolen oil. It's missing oil," Holness said.  He said it could be wastage, pilferage or technical losses and the audit should conclude the reason.

Here are the other highlights of the press conference:

Holness to meet with Auditor General
Immediately after the press conference, Holness will meet with Auditor General Pamela Monroe Ellis to discuss her report on Petrojam. He wants from the Auditor General, further recommendations to strengthen accountability.

Clear breakdowns, now more work for ministers
It is clear that there was a breakdown in oversight at Petrojam, Holness said. "Minutes were not provided and they were not requested. The Permanent Secretary has oversight responsibility for the Ministry and all its agencies but the Permanent Secretary does not give policy directives." So what more can the Government do? Holness announced that all ministers must now meet quarterly with the chairmen of the boards under their portfolios to review board minutes and activities and plan for the next quarter. Ministers must also now meet twice per year with boards. The requirements will be mandatory and will be included in the ministers' code of conduct. "It is going to mean more work," Holness said, however, he said there must be no excuse that ministers did not know about what was happening under their portfolios.

Blacklisting companies 
The Prime Minister believes that companies that benefited from Petrojam contracts in breach of the rules should be named. However, he first wants to clear the issue with the Attorney General. Holness said he has taken his cue from the Auditor General's report which did not name the companies and individuals that were controversially engaged by the refinery to provide services. 

Recovering misused funds
The Petrojam board is to be directed to recover funds that were misappropriated. Holness said Jamaica can only benefit if it embraces the principle of paying back money that was wasted or misused. He said whenever this happens, he will direct boards to initiate civil action to recover funds. "When a public agency begins to feel that it is appropriate to have personal expenses tagged on to the public funds then you begin to ask yourself the question, 'what is happening to the mission?'"

Weekly fuel prices
The Prime Minister has directed that minutes of weekly meetings to determine fuel prices be sent to the Energy Ministry and the Enterprise Division of the Ministry of Finance. He also said there are considerations for the minutes to be sent to independent bodies. There is some process of discretion used in setting the weekly fuel prices but there is a formula, Holness said. "It is in the exercise of that discretion that we can bring transparency," Holness said.

Petrojam upgrade
Holness said that both Venezuela and Jamaica have to accept responsibility for the delay in the Petrojam upgrading project. He said there have been leaks in the tanks at Petrojam which are very costly to repair. "Generally, the plant is old, so it is not operating at its true level of efficiency," said Holness, noting that the refinery upgrade has been lagging since 2006. Earlier this year, the Jamaican Government signed a memorandum of understanding with Venezuela for a buy-back of its 49 per cent stake in Petrojam. "What we see here as oil losses will continue to rise," Holness said, noting that the refinery is now obsolete. Meanwhile, Foreign Affairs Minister Kamina Johnson Smith said there is no haste on the part of Venezuela to complete the deal.

Returning Wheatley
The Prime Minister said he would not return the resigned Energy Minister Dr Andrew Wheatley to the Cabinet just yet. 

 

We want to hear from you! Send us a message on WhatsApp at 1-876-499-0169, email us at editors@gleanerjm.com or onlinefeedback@gleanerjm.com.