Tuesday, February 08, 2011

Protests in Belize Against Concession Leads to Possible Referendum Against Further Petroleum Exploration

7 News Belize: Cola Camps Out In Front PM’s Office
Amandala: Kimano, son of Denys - oil prospector!
Amandala: “A hell of a storm is coming”: Coalition to Save Our Natural Heritage
Amandala: It’s not all rocky mountain!
Amandala: No more secret petroleum deals, says Coalition to Save Our Natural Heritage
AmbergrisCaye: Oceana Victory: Oil Company Gives Up Concession on Sea
IMF: Belize: Selected Issues, IMF Country Report No. 08/92
Central Bank of Belize: Economic and Financial Statistics, September 2010

The conflict over the Belizean government’s ability to contract out parcels of Belizean territory, known as “concessions,” to foreign companies for oil exploration and development, came to a head this Wednesday when protestors from the NGO Oceana camped outside Prime Minister Barrow’s office demanding a say in oil exploration in protected areas. The overt public criticism of the Belizean government’s concession of environmentally protected areas for petroleum explorations is said to have been a major factor in Taiwanese petroleum company “OPIC” releasing their 1.139 million acre concession back to the Belizean government. However public outcry did not stop the Belizean government from quickly re-contracting out this same vast tract of shoreline to another petroleum developer, Paradise Energy, Ltd. In response to this contract, protestors gathered on Wednesday in front of Prime Minister Barrow’s office declaring government abuse of section 13 of Belize’s Petroleum Act. The third provision of section 13 allows the government to issue concessions with only the approval of the cabinet in situations where the “technical or economical circumstances make is advisable,” or where the Prime Minister “determines that the circumstances so require.” Protestors claim that the first and second provisions of section 13 call for transparency and accountability by requiring “public competitive bidding” between petroleum companies, publication of the areas that are up for bid in the country’s Gazette and the establishment of rules and procedures for submitting a bid. In addition to contending that the contracts are illegally entered into under the first two provisions of Section 13, protestors also argue that the territories conceded actually include nationally protected areas that undoubtedly will be destroyed if the government allows oil exploration and development.

Although Prime Minister Barrows claims the concessions were made in the economic interest of the Belizean people, critics believe his claim invalid for three reasons: 1) no shares in a national oil company have been offered to the people (as was promised by Prime Minister’s United Democratic Party manifesto); 2) oil resources will be exhausted by 2019 according to a report by the International Monetary Fund; and 3) the negative economic impact to major Belizean industries and exports would be irreparable. The Belizean tourist and fishing industries would be devastated by the destruction of barrier reefs due to offshore drilling and the ecological environment of one of Belize’s main economic exports, citrus, would be destroyed. Further ecological sacrifice for petroleum development appears imprudent when the depletion of Belize’s oil resource is only seven years away and where the ecology, as is, has been more lucrative for the economy. Currently, the rare ecology of Belize is the selling point of Belize’s “all-natural” commercial products, the source of their citrus exports, their fishing industry, and the draw of their tourism industry.

Another contentious point raised by the protestors is that the current method of leasing concessions to foreign oil developers reaps the least fiscal benefit for the people. Protestors point to worldwide examples of countries that retain only a small percentage of profits when they allow export of crude oil by foreign refining companies who retain the larger bulk of profits. Currently, although Belize makes approximately $100 million in exporting petroleum, the country spends $140 million in importing refined oils. Further, speculations have arisen about the private interests of Prime Minister Barrow in his quick and quiet selling of concessions to Paradise Energy, Ltd., a company with very limited experience in petroleum exploration and of which his nephew is a 50% shareholder.

Remarkably the outcry of 40 protestors on Wednesday led the Prime Minister to delay concession of OPIC’s recently released territory to Paradise Energy, Ltd. in order to allow Oceana time to conduct a referendum on the matter. However, Prime Minister Barrow has said that if Oceana is unable to orchestrate such a referendum, then the government’s right to sell the concession is clear, even in protected areas, per a recent Belizean Supreme Court ruling. Protestors contend it is illegal to keep citizens of a country from living in protected territories for the sake of preservation but then later allow foreign petroleum companies to ravage the same land for oil. Thus far the concession has been halted, but tensions linger regarding whether the government will provide adequate time to hold a referendum and then, if such a referendum is successful, whether the Prime Minister will actually adhere to the voice of the people in his final decision regarding the agreement to the concession.

1) Should the section in the Belize Petroleum Act, which allows the Prime Minister to issue petroleum contracts with only the approval of the Cabinet, be amended or should the Act only allow petroleum development contracts to be issued by referendum?
2) If you think Belize should allow oil development in the country, should contracts for oil development only be given to domestically owned companies? Do you think Belize should even consider oil development as an economic stimulant when their supply is predicted to be depleted by 2019?

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