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N Touch
Friday 15 December 2017
Editorial

Widen Petrotrin probe

Independent corroboration of discrepancies in the production receipts submitted by a lease operator to State-owned Petrotrin demands action not only against one company but also against any other company found to have committed similar misdeeds. The full extent of this matter needs to be ascertained as a matter of urgency. A wider probe is required.

While the Petrotrin management has vowed to take decisive action against the lease operator in question, it cannot absolve itself of its own responsibility to taxpayers. It must explain how its internal systems came to be compromised and whether the discrepancies could have been picked up earlier.

Furthermore, any evidence of criminal wrongdoing must engage the attention of the relevant law enforcement authorities. Petrotrin must hand over pertinent information and cooperate with all external investigatory processes. It cannot use legal privilege as a fig leaf to deny scrutiny, as has, unfortunately, often been its record before parliamentary committees.

It is clear that the true cost of the “fake oil” scandal is not only in the overpayments which are likely to have occurred but also potentially widespread systemic breaches over decades, the true cost of which may never be known.

What is easily quantified, however, are the millions in legal fees and auditing expenses that have already been incurred in the probe of this matter. Where will it all end? The only payer seems to be the taxpayer.

On Friday, the company gave a telling glimpse of the nature of the breaches that have occurred. In relation to one specific payment, it noted it was discovered the relevant reservoir, “was not capable of producing the volume in question.” Such a fundamental error demands an explanation as to why it was not initially picked up by all the checks and balances which are in place.

Petrotrin must review and reform its systems to ensure they are robust enough. Furthermore, those systems must be subject to regular updating. The sad fact is persons with the intention of being corrupt are always finding new loopholes; new means of exploiting.

Meanwhile, there is a role to be played in this matter by the Ministry of Energy and Cabinet.

Petrotrin stands as a good example of yet another state entity that has “gone rogue” to some extent. If ever there was cause for reform of the relationship between state bodies and ministerial oversight this is it.

The public sector must implement procurement reforms as well as a revamped regime of control when it comes to the monitoring of spending and payments. There is potentially a role to be played in proposed entities such as the TT Revenue Authority which will be empowered to have greater oversight of the administration of tax affairs.

Indeed, the question of taxation revenue from the petrochemical sector is a pressing issue which underlines the State’s inability to properly maintain rigorous standards of oversight. Not only is there concern over overpayment, there is also concern about the opposite end of the spectrum: underpayment by private companies of oil and gas revenues.

Thus, the “fake oil” scandal is really an opportunity for the State to take stock and to say enough is enough. Action must be taken not only by Petrotrin but also by the State which has the power to bolster regulation.

Clearly, our public enterprises are vulnerable: whether through inefficiency, incompetence, lack of resources or corruption, they cannot be relied upon to police themselves in a way that protects the interests of the treasury. Decisive action is needed to set the tone and to send a signal that corruption in whatever form will not be condoned.

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