President Ramotar addressing the opening of the seminar on Sustainable Management of the Extractive Sector.

President Donald Ramotar on Wednesday urged the stamping out of corruption in the natural resources sector and recommended that gold-producing countries agree to a common tax regime to avoid cross-border smuggling of the precious yellow metal.

Addressing the opening of a two-day seminar on Sustainable Management of the Extractive Sector in Guyana, the Guyanese leader said he has learnt of Guyana’s gold being smuggled elsewhere where the royalty is lower.

“We should try to work with countries similar to ours that have similar resources to ours so that we can as far as possible have one standard regime going across the board,” he told the gathering of experts at the seminar being co-sponsored by the Guyana government and the United Nations Development Programme (UNDP).

The President ruled out Guyana lowering its royalty rate but urged other gold producing countries to come to the table and agree on a fixed common regime to deter corruption.

“I am not suggesting that we lower our royalty rate because I strongly believe that we should try to maximize what we get to invest in our people generally and to makee ourt country better.

“But we should probably work with other countries to try to see the possibility if we can get agreement to standardize those regimes so that we can discourage smuggling and loss of huge incomes that can be put in our people in a general sense,” he added.

Ramotar did not name the destination of smuggled Guyanese gold but Demerara Waves Online News (www.demwaves.com) was told that close to 200,000 ounces of the metal produced here annually is smuggled to neighbouring Suriname where the royalty is one percent and the tax is half percent. In Guyana the royalty is five percent and tax is two percent. A tiny percentage is also smuggled to neighbouring Brazil. Another incentive for gold smugglers is that they can be paid in Euros or United States dollars in Suriname unlike Guyana where the Gold Board cannot easily do so.

A section of participants and invitees at the opening of the seminar on Sustainable Management of the Extractive Sector in Guyana.

“As far as I hear, a lot of our gold is smuggled out to other countries where you have a lower royalty rate within the society,” he said.

Guyana's declared gold production last year was 360,000 ounces and the country is racing towards a target of 400,000 ounces for 2012.

Mongolia’s Former Minister of Mining, Zorigt Dashdorj told DemWaves that higher royalty rates are applicable in jurisdictions where the cost of production is lower and lower royalty rates where the cost of production is higher. Other factors, he said, include the geological features of the country being mined.

On the issue of corruption, the President urged that the bugbear be “confronted in every area” with a “strong enough” and transparent management system. “It is very tempting because of the nature of the activities to bribe people to turn an eye, to damage the economy,” he said.

Commissioner of the Guyana Geology and Mines Commission (GGMC), Rickford Veria, in his remarks, urged miners to cease viewing mining as just extracting gold and diamonds and paying taxes but pay attention to the different  values and social systems of residents there. “It is not enough to go in create jobs and pay taxes,” he said, adding that their views and welfare must be solicited.

United Nations Resident Coordinator in Guyana, Khadija Musa said the November 14 to 15 seminar would address a number of areas include economic policy formulation, environmental sustainability, human rights, anti-corruption measures and conflict prevention.

The panel of local and foreign experts would offer policy advice and share their experiences for the sustainable management of the extractive sector.