Petrojam shares take back hostile and unwarranted, says Paulwell

Opposition Spokesperson on Energy Phillip Paulwell says the government's decision to use legislative action to retake shares in Petrojam currently held by Venezuela may be detrimental to Jamaica's standing with foreign investors.

Minister of Foreign Affairs and Foreign Trade Senator Kamina Johnson Smith announced at a press conference today that the government decided on the avenue because Venezuela has not fulfilled its commitment to upgrade the refinery, among other issues.

READ: Jamaica to use legislation to retake Petrojam shares from Venezuela

Jamaica offered to buy back Venezuela's 49 per cent stake in Petrojam last March but the parties have not reached a settlement. 

Johnson Smith said Jamaica now has to act in the interest of the country.

But, Paulwell has labelled the government's action as hostile, premature and unwarranted.

“No apparent effort was made to use any international arbitration organisations to settle any dispute which may have arisen between the two governments, especially in light of reports that a settlement price was the only outstanding issue,” Paulwell charged.

“This hostile approach is uncharacteristic of Jamaica, and may, in fact, be detrimental to our future negotiating capacity with other foreign investors,” he added.

Full statement

Shadow of Minister of Energy, Mr. Phillip Paulwell says the Opposition is against the hostile takeover of the shares in Petrojam of the Government of Venezuela.

He said this premature and rushed expropriation of the shares is unwarranted as both sides were in talks to reach a negotiated settlement.

Reacting to an announcement at a press conference this morning by the Minister of Foreign Affairs and Foreign Trade, Senator the Hon. Kamina Johnson Smith, Mr Paulwell said it was particularly premature, given the fact that the Zacca Committee, which was appointed to look at the future of the Petrojam Refinery, is scheduled to report in May 2019 on its findings and recommendations.

In any event, he said, no apparent effort was made to use any international arbitration organisations to settle any dispute which may have arisen between the two governments, especially in light of reports that a settlement price was the only outstanding issue.

Mr Paulwell is, therefore, calling on the Prime Minister in his capacity as Head of Government and as Minister of Energy, to report to the nation on what role he played in the negotiation and to disclose immediately the factors which led to this urgent action of forcibly acquiring the shares of a non-hostile foreign partner.

Mr Paulwell said the expropriation will cause ripple effects to be felt in the local and international investor community for some time.

This hostile approach is uncharacteristic of Jamaica, and may, in fact, be detrimental to our future negotiating capacity with other foreign investors.

The expropriation of investor property must always be a last resort, demonstrably justified in a free and democratic society, and only after exhausting all reasonable avenues for an amicable settlement.

Consequently, the Opposition strongly feels that the negotiating effort was weak, having been left almost solely to the Minister of Foreign Affairs and Foreign Trade.

This present situation requires further explanation, particularly as it relates to the country’s energy security and our future relationship with the Bolivarian Republic of Venezuela.

Emphasising the seriousness of the government’s hostility and its possible implication, the Shadow Minister of Foreign Affairs and Foreign Trade, Ms Lisa Hanna, M.P., said this level of heavy-handedness is uncharacteristic of the Jamaican state and should not be countenanced against a government which has helped our people during our crisis.

She said Jamaica’s economic survival has been due in no small measure to the support and generosity of the Venezuelan people.

The Petro Caribe Fund provided by the Government of Venezuela represented the largest loan with the best financial terms in our independent history.

At a one per cent interest rate, the Venezuelan government provided Jamaica more the US$3 billion.

The Venezuelan Government went even further and accepted a US$1.5 billion settlement of our debt in July 2015, which not only reduced our debt to GDP ratio significantly but also helped to improve our international financial standing in aggregate terms.

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