Nigel Hughes says no law prevents him from representing Exxon while leading AFC
Kaieteur News – Nigel Hughes, the recently elected leader of the Alliance for Change (AFC) and a prominent attorney, has addressed criticisms regarding a potential conflict of interest. Critics have pointed out that his law firm’s representation of ExxonMobil Guyana Limited (EMGL) could pose a conflict with his new political role. Hughes, however, has asserted that there are no legal provisions prohibiting him from maintaining EMGL as a client while leading the AFC.
During a June 27 interview just days before he was elected leader of AFC, Hughes disclosed that Exxon is a client of his law firm – Hughes, Fields and Stoby. Hughes was asked during the interview, that if elected leader of the AFC will he urge the party to renegotiate the lopsided 2016 Production Sharing Agreement (PSA) which was signed with Exxon and the previous APNU + AFC Government for the lucrative Stabroek Block.
In response the now AFC leader said, “…I will say this and I think I said it the other night…Exxon is a client of our firm, I’m making it public now so nobody can’t say that I have never made it [known]. Several oil companies are clients of our firm. I cannot comment on that.”
On Sunday, the day after being elected leader of the AFC, Hughes stated that he would not sever ties with his law firm, which represents ExxonMobil, unless he is elected to government, according to a report by Demerara Waves Online News. Hughes told Demerara Waves, “No, no! This issue really only arises if and when I become President or acquire a position of power, because, then I’m in a position to influence government policy, they can claim. Right now, I can’t influence government and, therefore, it’s a theoretical conflict.”
The renegotiation of the 2016 deal has been the topic for ongoing debates. There have been calls from locals and industry experts urging Guyana’s leaders to reopen negotiations with ExxonMobil and its partners, Hess Corporation and China National Offshore Oil Corporation (CNOOC), to ensure more equitable benefits from the lucrative Stabroek Block.
Former Minister of Natural Resources, Raphael Trotman, and now General Secretary of the AFC, during his tenure under the Coalition government between 2015 and 2020, was the one who signed the deal in 2016 with Exxon. The deal Trotman signed waives all taxes from the oil companies, gives Guyana a 2% royalty on its rich resources, and agrees to the oil companies recovering 75% of investments before the remaining 25% is shared, with Guyana receiving 12.5%. The arrangement, with the lack of ring-fencing, sees Guyana paying for projects that are yet to commence production activities. Each month bills from future producing developments are added to the list of expenses to be cost-recovered by Exxon.
In response to Hughes comments to Demerara Waves, Vice President (VP) Bharrat Jagdeo posted to his Facebook page, “Nigel Hughes obviously did not read the definition of politically exposed persons in the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Act 2009.”
Jagdeo posted a snippet of the AML/CFT Act which explains who are considered a Politically Exposed Person (PEP). It states, “politically exposed person means any individual who is or has been entrusted with prominent public functions on behalf of a state, including a Head of State or of government, senior politicians, senior government, judicial or military officials, senior executives of state owned corporations, important political party officials, and a person who is or has been entrusted with a prominent function by an international organisation, at the level of senior management, including directors, deputy directors and members of the board or equivalent functions including family members or close associates of the politically exposed person whether that person is resident in Guyana or not;”
Hughes also on his Facebook page responded calling the Vice President’s post “another red herring.” He explained that he has been PEP since 2011 when his wife, Catherine Hughes became a member of the National Assembly. He noted that while his wife is still a Member of Parliament (MP), they have annually declared their assets to the Integrity Commission as PEPs.
Notably, Hughes said too that international client who seek to retain the services of his law firm usually conduct due diligence investigation of the firm and he had to declare that he is a PEP.
“Commercial Financial Institutions in Guyana have designated me as a PEP which obliges them to conduct a higher level of scrutiny on all of my financial transactions. All members of the National Assembly including the Vice President are PEPs. There is no magic to being PEP. The close relatives of all MPs are PEPs,” Hughes asserted.
To this end, he underscored that there is no law preventing him from having Exxon as a client. He said, “There is no law which prevents anyone from entering in contracts with PEPs.”
