Statement by the Prime Minister

Statement On PetroJam by Prime Minister Andrew Holness

Parliamentary Statement


The Most Honourable Andrew Holness ON, MP

Prime Minister

On PetroJam

June 26, 2018

Mr. Speaker, Cabinet, last evening on Monday, June 25th; I received a preliminary report on the operations of PetroJam, and on specific allegations in the public domain.

The meeting, which ended at approximately 11:00pm, gave the Cabinet the opportunity to question the General Manager and the management team of PetroJam as well as officials of the Ministry of Science, Energy and Technology.

Pursuant to the exhaustive discussions surrounding the report, the Cabinet gained a better understanding of the issues and problems at PetroJam, and has identified key areas of weaknesses in the governance of PetroJam. The weaknesses identified appear to be longstanding and systemic in nature and have impacted the governance, transparency and efficient running of the entity.

Some of the issues raised in the discussion highlighted governance and management practices that require a policy response that will improve governance not only at PetroJam but also across all public bodies.

As Prime Minister, I have tasked the Cabinet Secretary to compile the relevant legislation, regulations and policy guidelines relevant to the areas of weaknesses identified in order to close the existing gaps.

There were some issues reported on, that needed further clarity to better inform Cabinet’s decisions. Therefore, the Cabinet will task the Public Accountability Inspectorate to urgently gather further information on matters related to the direct expenditure of public funds, including but not limited to donations, and the construction of a wall and let me just explain here, well let me continue and then I’ll explain why we will decide to ask the Public Accountability Inspectorate.

The Cabinet notes the call from various stakeholders for a forensic audit into the operations at PetroJam.  The Cabinet shares the view that a detailed investigation into the management and governance of PetroJam is necessary and recalls that in 2010, the Auditor General reviewed a special forensic audit done by Papineau Consulting in 2009 on PetroJam.  The Auditor General presented its findings; this is the review of the forensic audit from this consultancy group on June 17, 2010.

So, Mr. Speaker it is not the first time that a forensic audit has been done on PetroJam and I would encourage members to read that report and I’m certain Mr. Speaker, when you read that report you would probably come to the conclusion that nothing much has changed. Have you read the report?  Oh, ok well.

The Cabinet is fully aware that the Auditor General is presently conducting an investigation into the operations of PetroJam. Other independent investigative bodies may also be conducting their own investigations into the operations of PetroJam and into allegations in the public domain. I’ve used this phraseology Mr. Speaker, may also be, because I don’t want it to appear the Government is in any way directing independent investigative bodies in their jobs. None of the bodies have come to me to say they are investigating, they don’t need my authority, say so, permission. That is the system of accountability and transparency and anti-corruption in Jamaica.  Yes, they just go and investigate and that is how it should be and that is how it should be.

So, Mr Speaker, the Cabinet has no control over the pace of these independent investigations or when the findings will be available. However, in the interim, Cabinet plans to take certain policy actions to ensure that PetroJam functions with probity, transparency and accountability. Which is why Mr. Speaker, we have decided to ask the Public Accountability Inspectorate of the Ministry of Finance to investigate certain aspects that we didn’t get clarity on and to do it quickly so that we can make the decision, both policy and management decisions that have to be made.

Based on the results of the meeting, Cabinet will prepare policy directions for the new Chairman and Board members. An immediate action thereafter will be the convening of the full Board, and the full board meaning Jamaican and Venezuelan directors to address the identified weaknesses in the governance and management of the entity and ensure that Government policy and systems of accountability are implemented.

The Cabinet is committed to ensuring transparency and forthrightness in addressing the challenges at PetroJam. The Cabinet will therefore share the report it received and its observations with the Auditor General and any other investigative body.

The Cabinet of Jamaica hears and understands the concerns expressed in the public domain.  The Government is sensitive to the impact that allegations of corruption have on public confidence as well as on the value, effectiveness and efficiency of PetroJam as a public entity.

The Government appreciates that in this age of social media and unfiltered information, the public needs to be constantly informed and assured of accurate information.  The Government is therefore even more constrained to ensure that it does its due diligence.

The Cabinet office is therefore now in the process of finalizing documentation of the decisions that we have taken and in short order, very short order, I will inform the country of the specific actions that will be taken by the Cabinet.