President Bharrat Jagdeo last week expressed his appreciation to Jubilee Research and other lobbyists in the United Kingdom who worked to secure a cancellation of Guyana’s nationalization debt to Bookers Plc, which was being pursued by the Big Food Group.
The Government of Guyana, upon nationalizing the sugar industry in 1976, issued a number of promissory notes to Bookers Plc covering a sum of 13M pounds sterling. However, the government paid back a substantial portion before it defaulted on the debt in 1989.
In December 1989, when Sir Michael Caine visited Guyana, and a memorandum of understanding was signed for increased co- operation between Bookers and the sugar industry including an equity injection, the government undertook to repay the outstanding 4.6M pounds subject to verification. Booker had undertaken to invest up to five million pounds in Guysuco in the form of loan stock at the time.
However, when Bookers’ Cash & Carry was taken over by the Iceland Group, which became the Big Food Group, the debt was recently pursued at the level of the International Centre for the Settlement of Investment Disputes (ICSID). The government retained former attorney general, Fenton Ramsahoye, to oppose the action and sought assistance from the World Bank and UK government in the event that it was ordered to pay the disputed sum.
The pressure group, Jubilee Research, began a sustained campaign against the debt, and the company on March 17 announced that it would not pursue the debt, which it had written off its books the previous year. The debt, which now stands at 13M pounds, was a fraction of the Big Food Group turnover of 5.5B pounds last year. However, it would have represented a payout of US$20 million from Guyana, a sizeable chunk of the country’s revenue. Jagdeo expressed his appreciation to Glen Greaves of the ruling People’s Progressive Party (PPP) UK Branch who worked along with other groups to sensitise the British public on the issue.
The President expressed appreciation to reporters Nick Matheson of the Observer and Geoff Gibbs of the Guardian for their reports on the matter, as well as lobbying by Susan Mitchelle, Betty Ford, Romilly Greenhill, Ashok Sinha and Kim Patel of Jubilee Research, and Martin Powell and David Trims of the World Develop-ment Movement.
The President also ex-pressed his thanks to the Big Food Group itself for having taken the decision to abandon its claim.
Jagdeo said the campaign to have the debt written off was rather innovative and it spanned British parliamentarians raising the question of debt relief and in this case with Chancellor of the Exchequer Gordon Brown.
Debt relief since the Paris Club has enshrined a comparability clause to prevent the selective repayment of debt. Had Guyana been forced to repay the debt it owed Bookers Plc, it would have violated those terms and put in jeopardy relief under HIPC terms.
The President also said there was a letter-writing campaign to the Chief Executive Officer of the Big Food Group and a number of prominent people made statements.
The media in Britain compared the pursuit for compensation by the Big Food Group to Nestle, the Swiss food conglomerate, which attracted disdain for its attempts to recoup funds from the Ethiopian government. Nestle too had dropped its claim in the face of public outrage. a
“We have reviewed this matter carefully and believe the interests of both our company and those of the people of Guyana are best served by not proceeding,” the Big Food Group said in a statement to the British media. Ramsahoye would still appear before ICSID this weekend for a formal withdrawal of the case by the Big Food Group.