Published On: Mon, Jan 8th, 2018

The implications of the legal relationship of the Curaçao Government with Guangdong Zhenrong Energy Ltd. Part 1

WILLEMSTAD - The risks involved in an impetuous implementation of (in my opinion) an ill-conceived Memorandum of Understanding, followed by a Heads of Agreement (HoA) with the Chinese corporation Guangdong Zhenrong Energy company Ltd. (GZE) are extremely high. In the event that these already signed MoU and HoA should be implemented, Curaçao will completely lose the operational activities, including the management and control of its two-deep seaports, its most important natural resources, to the Chinese and in this way the control of its future economic growth and development will transit into the hands of a foreign entity. The geopolitical consequences of this scenario are far-reaching indeed.
In the MoU an escape clause had been inserted, purporting to a mutual release of both parties from binding obligations, if no binding agreements would have been concluded between the parties within two months (with an extension of another two months) after the date of signing, If and insofar as a binding agreement would have been concluded the escape clause could not be invoked anymore.

Therefore it was of the greatest significance that the legal instrument would have been carefully scrutinized before proceeding to concluding any further binding instruments. Such was also demanded by the then Prime Minister Hensley Koeiman of the MAN-party, which is a coalition partner in the present Cabinet Rhuggenaath of the PAR. This party scored the highest number of votes at the latest election on April 28th in 2017. The initial MoU was signed on September 14th 2016 and starting as of that date various deadlines had to be met by GZE for the subsequent agreements. Not even one single deadline was met, which circumstance by itself already divests the agreement of its binding legal force. The first deadline was set for May of 2017 and as proof of its goodwill and willingness to co-operate PDVSA allowed experts(?) from GZE on the premises to inspect all the installations and to perform whichever technical  investigation GZE deems fit. This also happened accordingly and for months experts from GZE walked around and within the premises of the refinery with their hard hats on and their clipboards firmly in hand, viewing and writing and doing whatever they considered necessary to obtain an insight into the technical state of maintenance of the refinery.
All this, even though both the government of Curaçao and GZE had simply disregarded the fact that the full co-operation of PDVSA was needed for the implementation of the signed MoU, whereas PDVSA itself was not a party in this legal instrument, since the current lease agreement with PDVSA which is due to expire on December 31st, 2019 could not be infringed upon by anyone, not by the government, nor by any other third party. Especially since the government itself had already confirmed in writing to PDVSA  that by the date of January 1st, 2020 the lease agreement had been terminated, which implies that until that date PDVSA was exclusively empowered to decide if and with whom it might be willing to form a strategic alliance. Therefore prior to the date of January 1st, 2020 neither the government of Curaçao, nor GZE, nor any other party had the authority to make any agreement that a third party would be allowed to interfere in the operational activities of Isla, as such had been literally agreed upon in said MoU, nor that PDVSA could be forced to conclude a strategic alliance with whomever the government of Curaçao chooses. Even more so, since PDVSA has the opportunity and full power up to the date of December 31st 2019 to propose a strategic partner of its own choosing.

The facts however, belie and disprove GZE’s predictions and promises, since up to this date none (not even one) of the guarantees provided by GZE in full-page advertisements in December 2015 have come to pass. On the contrary, GZE simply ignores and implicitly denies all its previous promises and guarantees. Moreover GZE expressly deceived the government by misrepresentations in elaborate Power Point Presentations, greatly exaggerating its ability to comply with its promises. And it continues to deceive the Government by openly denying its financial problems in the Far East and by lying about its technical capabilities and financial strength and by hiding the actual figures from its operational activities in its core business ( i.e. trading) from the Government. GZE denied all its financial and legal problems as publicized by Reuters, but Reuters insisted on true reporting and even produced the news release originating from the inner circle of GZE.

In the meantime approximately a year and a half have lapsed since the signing of the initial agreement in 2015 and GZE succeeded in procrastinating and dragging its feet for a full year and a half without meeting any deadline agreed by it, and without investing a single dime in the upgrading of the Isla refinery and without creating one single job in the labor market of Curaçao. GZE, however,  did succeed in coercing the government into signing an Addendum to the original agreement by which instead of upgrading the Isla, GZE would be permitted to construct a whole new refinery in the Bullenbay Area behind the existing oil terminal and to build an LNG-terminal under a B.O.O. regime, thus acquiring ownership of a large part of the deep seaport at Bullenbay This fully discloses and proves incontrovertibly the hidden agenda of GZE from the start, which is to obtain control and management of the Bullenbay deep seaport. Such has been confirmed in writing in article 4 of the initialed draft of the Heads of Agreement. Apart from this GZE also managed to sign co-operative agreements with practically all government-owned companies of any significance in Curaçao. All this with the full co-operation of the current government, thus enabling GZE to take an inquisitive peep into the future investment plans and objectives contemplated by those government-owned companies, so as to enable GZE to subsequently direct the anticipated investments to Chinese companies and in so doing support the Chinese economy.

And all this is taking place under the pretext of supporting the growth of the Curaçao economy, whereas the question arises if GZE will be investing in the economy of Curaçao or if Curaçao will be investing in the Chinese economy by the purchase of billions of dollars worth of technical equipment, for example for the upgrading of the Isla, provided that GZE might find financial support for its grandiose plans, for GZE itself lacks the financial resources to fund its proposed plans, In the meantime approximately a year and a half have lapsed since the signing of the initial agreement in 2015 and GZE succeeded in procrastinating and dragging its feet for a full year and a half without meeting any deadline agreed by it, and without investing a single dime in the upgrading of the Isla refinery and without creating one single job in the labor market of Curaçao. GZE, however,  did succeed in coercing the government into signing an Addendum to the original agreement by which instead of upgrading the Isla, GZE would be permitted to construct a whole new refinery in the Bullenbay Area behind the existing oil terminal and to build an LNG-terminal under a B.O.O. regime, thus acquiring ownership of a large part of the deep seaport at Bullenbay This fully discloses and proves incontrovertibly the hidden agenda of GZE from the start, which is to obtain control and management of the Bullenbay deep seaport. Such is confirmed in writing in article 4 of the initialed draft of the Heads of Agreement. Apart from this GZE also managed to sign co-operative agreements with practically all government-owned companies of any significance in Curaçao.

All this with the full co-operation of the current government, thus enabling GZE to take an inquisitive peep into the future investment plans and objectives contemplated by those government-owned companies, so as to enable GZE to subsequently direct the anticipated investments to Chinese companies and in so doing support the Chinese economy. And all this is taking place under the pretext of supporting the growth of the Curaçao economy, whereas the question arises if GZE will be investing in the economy of Curaçao or if Curaçao will be investing in the Chinese economy by the purchase of billions of dollars worth of technical equipment, for example for the upgrading of the Isla, provided that GZE might find financial support for its grandiose plans, for GZE itself lacks the financial resources to fund its proposed plans.

In the meantime approximately a year and a half have lapsed since the signing of the initial agreement in 2015 and GZE succeeded in procrastinating and dragging its feet for a full year and a half without meeting any deadline agreed by it, and without investing a single dime in the upgrading of the Isla refinery and without creating one single job in the labor market of Curaçao. GZE, however,  did succeed in coercing the government into signing an Addendum to the original agreement by which instead of upgrading the Isla, GZE would be permitted to construct a whole new refinery in the Bullenbay Area behind the existing oil terminal and to build an LNG-terminal under a B.O.O. regime, thus acquiring ownership of a large part of the deep seaport at Bullenbay This fully discloses and proves incontrovertibly the hidden agenda of GZE from the start, which is to obtain control and management of the Bullenbay deep seaport. Such is confirmed in writing in article 4 of the initialed draft of the Heads of Agreement. Apart from this GZE also managed to sign co-operative agreements with practically all government-owned companies of any significance in Curaçao.

All this with the full co-operation of the current government, thus enabling GZE to take an inquisitive peep into the future investment plans and objectives contemplated by those government-owned companies, so as to enable GZE to subsequently direct the anticipated investments to Chinese companies and in so doing support the Chinese economy. And all this is taking place under the pretext of supporting the growth of the Curaçao economy, whereas the question arises if GZE will be investing in the economy of Curaçao or if Curaçao will be investing in the Chinese economy by the purchase of billions of dollars worth of technical equipment, for example for the upgrading of the Isla, providing that GZE might find financial support for its grandiose plans, for GZE itself lacks the financial resources to fund its proposed plans, as well as the technical know-how to attain the objectives contemplated.

By Marguérite Nahar 

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