Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1694871149909.pdf (Jamaica)
commenced from 2010 June 30 via the LNG Steering Committee and prior to the Cabinet’s approval of the ‘Negotiation Team’ on 2010 October 25.

In this regard, Mr. Nigel Logan, Acting Group Managing Director, in an interview with the OCG, which was held on 2010 December 7, stated, inter alia, that “…also the concern that…we were asked to negotiate with the EXMAR Consortium and then hearing that the negotiation team had not been approved by Cabinet...
I came to understand from a telephone conversation that Cabinet had not approved the negotiation team, even though all the emails about the timing of the negotiations and so, and the venue and everything was…copied to the Permanent Secretary, but who has never indicated that the team had not been approved… And the Minister indicated that it had not been approved by the Cabinet.
However I was asked to continue negotiations.” Implementation Agreement The OCG, in its Statutory Requisition, which was addressed to Mr. Glenford Watson, Senior Legal Counsel, MEM, and which was dated 2010 December 21, posed the following question: “The OCG has been advised by the Permanent Secretary in the MEM, Ms. Hillary Alexander, in her sworn response to the OCG’s Statutory Requisition, which was dated November 12, 2010, that “Negotiations are currently being undertaken with the preferred bidder to finalize the Implementation Agreement between the GOJ and Exmar Consortium”.
Please indicate, as the Senior Legal Officer, MEM, whether you are aware of same…”210 Mr. Glenford Watson, in his response to the OCG’s Statutory Requisition, which was dated 2011 January 26, stated, inter alia, the following: “I am aware that on November 12, 2010, negotiations were being undertaken between the GOJ and the preferred bidder Exmar Consortium, as to, the terms and condition of 210 OCG’s Statutory Requisition to Mr. Glenford Watson, Senior Legal Counsel, MEM, which was dated 2010 December 21.
Question #6 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 401 of 609 LNG Investigation an Implementation Agreement that would explicitly set out the detailed roles and responsibilities of the Exmar Consortium and the GOJ in the implementation of the project…”211 The Minutes of the Meeting of the NCC, which was held on 2010 November 10, stated that the “…Commission considered a letter dated 2010 November 5 from the Permanent Secretary in the Ministry of Energy and Mining requesting the endorsement of the Commission that negotiations be held with Exmar Consortium to settle on appropriate terms and conditions for the provision of the FSRU facility.
It was imperative that the Agreement be finalized and executed by November 15, 2010, and as such it was anticipated that the matter would be considered by Cabinet on November 8, 2010…The Commission noted that the proposal was outside the remit of the NCC.” The OCG received a letter from Mr. Glenford Watson, Senior Legal Officer, MEM, which was dated 2010 November 11, in which he stated, inter alia, the following: “Without prejudice to any on going investigation by your office, I am obliged to request your kind opinion as to whether, as a general principle, it would be permissible for the Government to enter into an Implementation/Direct Agreement with the Project Company and the members of the Project Company (Consortium) as co-signees?
This Agreement would contain the normal boiler plate provisions expected in a project of this nature.

The intent would be to also hold Exmar and Promigas, developers of the FSRU and pipelines, respectively, directly liable for their respective operations.
This would allow the Government to look to both the Project Company and the individual members of the Consortium for any redress…” (OCG’s Emphasis) The OCG responded to the referenced letter from Mr. Glenford Watson on 2010 November 16 and stated, inter alia, the following: 211 Response from Mr. Glenford Watson, Senior Legal Counsel, MEM, which was dated 2011 January 26.

Response #6.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 402 of 609 LNG Investigation “Having regard, among other things, to (a) the matters which are outlined in the OCG’s Notice of Enquiry which was dated June 22, 2010, and which was formally conveyed to your Ministry and to the PCJ, and (b) the fact that a major and extensive OCG Investigation is currently under way, it would be highly inappropriate for the OCG to render any advice to you other than for you to summarily and immediately abort the subject process.” (OCG’s Emphasis) It is critical to note that the referenced letter was copied to the Honourable Prime Minister, the Honourable Minister of Energy and Mining, the MEM Permanent Secretary and the Group Managing Director (Acg.)
of the PCJ.
The OCG, in its Statutory Requisition to Mr. Glenford Watson, which was dated 2010 December 21, posed the following questions: “The OCG was advised, by way of the Minutes of the National Contracts Commission (NCC), dated November 10, 2010, that the NCC considered a letter which was dated November 5, 2010 from the Permanent Secretary in the MEM requesting the endorsement of the Commission that negotiations be held with Exmar Consortium to settle on appropriate terms and conditions for the provision of the FSRU facility.
By way of a letter which was dated November 11, 2010, you, in your capacity as the Senior Legal Officer, MEM, wrote to the OCG requesting an opinion as to whether “…it would be permissible for the Government to enter into an Implementation/Direct Agreement with the Project Company and the members of the Project Company (Consortium) as co-signees…” The OCG on November 16, 2010 responded to the referenced letter by stating, inter alia, that “…it would be highly inappropriate for the OCG to render any advice to you other than for you to summarily and immediately abort the subject process.” Based upon the foregoing, please provide answers to the following questions: a) Please explicitly state, as the Senior Legal Officer, the reason why the MEM, on _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 403 of 609 LNG Investigation behalf of the GOJ, was then requesting to enter into an Implementation/Direct Agreement with the Exmar Consortium, as referenced above; b) Please provide an Executive Summary and/or the respective documentary evidence outlining the referenced “appropriate terms and conditions” which are/were to be settled with the Exmar Consortium for the provision of the referenced FSRU facility; c) Please indicate whether such terms and conditions have been settled and provide full particulars of the decisions, if any, which have been taken as a result of same; and d) What is the current status of the project since the referenced recommendation of the OCG to abort the process was received by you, for and on behalf of the MEM?”212 Mr. Glenford Watson, in his response to the OCG’s Statutory Requisition, which was dated 2011 January 26, stated, inter alia, the following: “Pursuant to Cabinet Decision dated June 14, 2010, approving the selection of the Consortium as the preferred bidder and authorizing negotiations of the details for the implementation of the FSRU.
By way of clarification, the letter was not to solicit the approval of the OCG to enter into the Implementation/Direct Agreement with the Consortium.

Rather, the letter was intended to obtain the opinion of the OCG as to whether, in addition to the Consortium, each individual member could properly execute an Implementation/Direct Agreement in its own capacity.

212 OCG’s Statutory Requisition to Mr. Glenford Watson, Senior Legal Counsel, MEM, which was dated 2010 December 21.
Question #23 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 404 of 609 LNG Investigation (b) See copy of draft Agreement, as at November 25, 2010.

From the document and associated emails (also attached) it will be obvious that certain terms of the draft Agreement were still not settled.

(c) I am not aware of this as the LNG Project is now being facilitated under the direction of the OPM.
(d) Please see (c) above.

Additionally, please note copy of opinion from the Chambers of the Attorney General"...213 The OCG conducted a review of the opinion from the Chambers of the Attorney General, which was dated 2010 December 7, and which was entitled “Letter of November 16, 2010 from the Office of the Contractor General in connection with the LNG Project”.
The referenced opinion from the Chambers of the Attorney General indicated that the OCG “…acted ultra vires to the CG Act in which the advice rendered in the instant case is of no legal effect and is void.” The OCG also found that a Cabinet meeting was held on 2010 November 8, in which public officials such as Mr. Glenford Watson, Senior Legal Officer, MEM, Mr. Douglas Leys, Solicitor General, Ms. Sonia Mitchell of the Office of the Prime Minister and Mr. Parris Lyew-Ayee, Chairman of the Petroleum Corporation of Jamaica, were in attendance.
The referenced meeting was in regard to “Permission to Negotiate an Implementation Agreement With the Preferred Bidder for the Liquefied Natural Gas (LNG) Project”.

The OCG found that the following, inter alia, was discussed: “The Cabinet had before it a Submission No.
531/MEM-52/10…The Submission outlined the proposal for an Implementation Agreement to be entered into with EXMAR Consortium (Jamaica) Limited for the implementation of the LNG Project to design, build, finance, own and maintain a Floating Storage Regasification Unit (FSRU) and pipeline infrastructure for operation in Jamaica… 213 Response from Mr. Glenford Watson, Senior Legal Counsel, MEM, which was dated 2011 January 26.

Response #23.
Response #23.

_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 405 of 609 LNG Investigation The Minister of Energy and Mining explained the Submission, with support from the Solicitor General and other members of the LNG Negotiating Team.
They advised, inter alia, that what was required of the Cabinet was approval of the principal terms of the Implementation Agreement…in order to meet a 15 November 2010 deadline.
The following issues were among those discussed by the Cabinet: • the recommendation to proceed with the Implementation Agreement was being made when the final report of the independent consultants was not yet available and would not be ready for another two weeks; and their preliminary report indicated concerns regarding market assessments, the choice, location and operation of the FSRU, and deficiencies in the Request for Proposals, among other issues; • • • • • • • the comments of the Ministry of Finance and the Public Service were not provided; there was an approaching deadline of 15 November 2010 under the LNG Project which, if not met, would affect the ability to implement the Project and its overall success; the Implementation Agreement as presented was not complete and there were major areas to be settled; the implications of the development that it had originally been one party, EXMAR, and this had now been expanded to reflect three additional parties; the long-term policy and legal considerations; the need for an assurance that the terms of the Project were the best that could be negotiated for Jamaica; and the need for further consultations with the Contractor General, among others.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 406 of 609 LNG Investigation After further discussion, the Cabinet noted information provided that further discussions were scheduled with the Preferred Bidder on Wednesday of that week (10 November 2010); and decided to defer the matter, pending receipt of the report of the independent consultants in two weeks’ time and instructed that the Minister of Energy and Mining advise the Prime Minister of the outcome of the discussions with EXMAR, if these were held.” (OCG’s Emphasis) Based upon the foregoing, the OCG found that the Cabinet instructed the PCJ and the MEM to consult with the OCG in regard to the Implementation Agreement.
However, the above referenced letter which was sent to the OCG, by Mr. Glenford Watson, did not: a) explicitly state Cabinet’s recommendation; b) enclose a copy of the Draft Implementation Agreement; and/or c) inform the OCG of the reasons for the Implementation Agreement.
To the contrary, the OCG was being asked to provide answers and/or its opinion to the MEM, solely based upon the representations which were made in Mr. Glenford Watson’s letter, in regard to a purported ‘development’ in the ‘FSRU LNG Project’ and without the benefit of the particularized instructions which were given by the Cabinet of Jamaica.
Further, the ‘Notes on the LNG Negotiating Team Tele Conference with Latham & Watkins…and CH-IV…’, which was held on 2010 September 7, indicated that “…The Exmar Consortium by way of letter to the LNG Project Coordinator has indicated that they would not be able to hold the price after the November 15 deadline…Exmar had secured a shipyard for the FSRU until November 15 and would have to re-negotiate the price with the managers of the shipyard and this may incur additional cost…” (OCG’s Emphasis) Based upon the foregoing, the OCG found that the deadline which was set for the signing of the Implementation Agreement was in accordance with the timeline which was given by the Exmar Consortium.
By way of the ‘Notes on the LNG Negotiating Team Tele Conference with Latham & Watkins…and CH-IV…’ from the LNG Negotiation Team Meeting which was held on 2010 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 407 of 609 LNG Investigation October 6, the OCG found that the LNG Negotiation Team was integral in the drafting of the Implementation Agreement.
As at the referenced date, however, the OCG found that the Negotiation Team was uncertain of the composite structure, amongst other critical information, with respect to the Exmar Consortium.
The ‘Notes’ stated, inter alia, as follows: “…Parties subject to determination of whether each of Exmar, Promigas and CLNG will execute this Agreement separately, or whether they will form a single group and execute it through that group… ….Note to GOJ: To discuss Exmar’s current training programs and Developer’s obligation with respect to training.” By way of Cabinet Decision No.

45/10, which was dated 2010 December 6, in regard to Submission No.
531/MEM-52/10 regarding “Permission to Negotiate an Implementation Agreement with the Preferred Bidder for the Liquified Natural Gas (LNG) Project”, the OCG was informed that “The Cabinet agreed that the Submission would be withdrawn from the Agenda; and noted that the draft Implementation Agreement had been finalized and would be referred to the Project Committee established to oversee the direction of the LNG Project, along with the report from the Independent Consultants and the response thereto…” (OCG’s Emphasis) _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 408 of 609 LNG Investigation Procurement for the 480MW of Base-load Generating Capacity on a Build, Own and Operate (BOO) Basis On 2010 September 8, the Jamaica Gleaner published an article that was entitled “Exmar deal hits new snag” in which it was reported, that “The requirement for the Jamaican government to invite public tenders for new generating capacity is likely to mean a delay in its December 2012 deadline for the commissioning of an LNG storage and regasification facility and even undermine the ability of Exmar Corporation, the government's controversial preferred bidder on the project, to bring it to fruition.” The referenced article further indicated, inter alia, the following: “According to Wednesday Business sources, with Exmar not yet knowing who will be customers for natural gas it hopes to supply on the Jamaican market — or even if there will be takers — it has been unable to enter serious negotiations with bankers for the financing of the more than US$600 million project… But under the rules of the electricity production and distribution sector, they say, any addition of more than 15 megawatts of power intended for the national grid has to be the subject of public bidding to ensure that it is delivered at the best price… "The OUR (Office of Utilities Regulation) is obligated to give at least 90 days for a response (to a request for proposal)…” In light of the foregoing, the OCG requisitioned Mr. Ahmad Zia Mian, Director General, OUR, on 2010 September 10, in an effort ascertain a comprehensive understanding of the OUR’s involvement, inter alia, in the ‘FSRU LNG Project’.
The referenced OCG Statutory Requisition posed, inter alia, the following question: “Please provide an Executive Summary indicating the role(s) and responsibility(ies) of _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 409 of 609 LNG Investigation the Office of Utilities Regulation (OUR), if any, in regard to the captioned project.
The Executive Summary should also include the extent of your, and/or any Public Official(s)/Officer(s) who may be acting on behalf of the OUR, involvement in and/or affiliation, if any, with the overall LNG Project and, in particular, the captioned matter.”214 Mr. Zia Mian, in his response to the OCG’s Statutory Requisition, which was dated 2010 October 1, stated the following: “The Office has no direct role or responsibility with regard to the captioned project or with the overall LNG project for that matter.
Such direct responsibility lies squarely with Petroleum Corporation of Jamaica (PCJ).”215 Mr. Zia Mian, in his response to the OCG’s Statutory Requisition, which was dated 2010 October 1, further stated, inter alia, the following: “There is no legislative and regulatory framework to govern the usage of Gas.
It is understood that the facilitation of LNG as an available and cost effective fuel option would enable power utility service providers, off takers as well as the grid operator to deliver services in a more efficient and cost effective manner that would redound to the benefit of end user customer.

The fact is that such customers pay for fuel costs, which are a direct pass through from the grid operator Jamaica Public Service Company Limited (JPS).
These cost considerations as they affect the public interest, as well as the power industry as a whole, are key considerations for the OUR given its statutory remit to: (a) Ensure that prescribed utility service operates efficiently and in a manner designed to afford to its consumers economical and reliable service.
(b) Protect the interests of consumers in relation to the supply of a prescribed utility service 214 The OCG’s Statutory Requisition to Mr. Ahmad Zia Mian, Director General, OUR, which was dated 2010 September 10.

Question #1 215 Response from Mr. Ahmad Zia Mian, Director General, OUR, which was dated 2010 October 1.
Response #1 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 410 of 609 LNG Investigation (c) Promote and encourage the development of modern and efficient utility services In light of the above, the OUR has drafted a Request for Proposals (RFP) for the solicitation of 480MW of generation capacity which would accommodate generators using Gas.
This draft RFP has been sent to officials at the World Bank for its approval…”216 By way of a Media Release, which was dated 2010 October 7, and which was entitled “OUR invites bids for 480 megawatts of additional generating capacity” the OUR indicated, inter alia, the following: “The Office of Utilities Regulation (OUR) has invited bids from twenty-eight local and international companies, including the Jamaica Public Service Company Limited (JPS), to supply 480 megawatts of new generating capacity.
This is the largest block of generating capacity ever sought by the OUR and it’s intended to: allow for the displacement of old and inefficient generating plants; provide for growth in demand and improve the efficiency of the overall electricity generation system.

The installation of the new generating capacity is scheduled to be carried out in two phases.

The first 360 megawatts is scheduled to be installed by 2014 while the remaining 120 megawatts is to be installed by 2016.
The Request for Proposals (RFPs) seeks to achieve the goals of ensuring that Jamaica improves its energy efficiency in generation, contribute to fuel diversification which will impact energy security and most importantly, positively impact the affordability of electricity.

The request coincides with the initiative taken by the Government to introduce natural gas as the fuel of choice for electricity generation and for the mining sector as outlined in the 2009 – 2030 National Energy Policy.
The RFP was issued on September 30, 2010 and bids are to be submitted no later than 216 Response from Mr. Ahmad Zia Mian, Director General, OUR, which was dated 2010 October 1.
Response #1 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 411 of 609 LNG Investigation January 7, 2011 in keeping with the schedule outlined in the bid document.”(OCG’s Emphasis) Mr. Zia Mian, in his response to the OCG’s Statutory Requisition, which was dated 2010 October 1, further stated, inter alia, the following: “…On February 12, 2010 at a meeting with the HPM, the Ministry of Energy and Mining suggested that the construction of new generation capacity be allocated without competition.
Presumably this would allow Exmar to meet its financial closure deadline.

The OUR informed the HPM that unless it receives a directive from the Cabinet or there is a stated change in the government policy, the OUR cannot acquire new capacity without competition.

The HPM directed that there should be competition.

However, I understand, he wished that a way should be found to allow the Exmar to meet its November 15, 2010 deadline.
Consequently, the Ministry sought the approval of the National Contracts Commission (“NCC”) to proceed on limited bidding asset…”217 (OCG’s Emphasis) The MEM, by way of a letter which was dated 2010 September 17, wrote to the Chairman of the NCC, Mr. Raymond McIntyre, requesting the NCC’s urgent consideration and approval for the use of the Limited Tender Procurement Methodology for the procurement of 480 MW of Generating Capacity, pursuant to a 2010 Generation Expansion Plan.
The referenced letter stated, inter alia, the following: “…The planned capacity is estimated at a cost of approximately US$632 million…The 2010 Generation Expansion Plan…calls for the displacement of the Old Harbour units 2, 3 and 4 and Hunts Bay B6 (292 MW) and construction of LNG-fired generating plants to deliver 360 MW of electricity by 2014, with an additional 120MW by 2016.
The existing legislative and regulatory framework for the generation and supply of 217 Response from Mr. Ahmad Zia Mian, Director General, OUR, which was dated 2010 October 1.
Response #1 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 412 of 609 LNG Investigation electricity (to members of the public) is largely set out in the Electric Lighting Act and the Jamaica Public Service Company Limited All-Island Electricity Licence 2001… The MEM has submitted to the OUR, that there are extenuating circumstances to be considered under the Natural Gas Base Plan for the addition of the 480MW of electricity from LNG onto the National Grid.
These include the following factors: o The use of the LNG required special consideration to allow for a business process/framework that can create an appropriate LNG infrastructure in an expeditiously [sic] and timely manner; o the productive base of the country and the revival of the bauxite and mining alumina sector, as well as the tourism sector, all require the most expeditious implementation of an alternate energy source to HFO.
LNG represents such an alternate energy source; o a Request for Proposal (RFP) to finance, build, own and operate a Floating Storage Re-gasification Unit (FSRU) and pipeline infrastructure was issued in September 2009 [sic].

The RFP resulted in the identification of a Preferred Bidder but it is now necessary to identify the potential off-takers who will be using the LNG for the generation of electricity.
This is needed to facilitate certain commitments associated with the LNG project, including a Final Investment Decision in relation to the FSRU, on or before November 15, 2010.

As advised, the failure to finalize by said date is likely to result in delays and increased capital cost for the FSRU.
Consequently, the selection of the potential gas-offtakers/generators of electricity is most urgent and an open tender for the identification of the potential generators of the required capacity is not likely to meet this timeline: o undue delay may result in the local LNG project losing its slot for the construction of the required FSRU and the project may become delayed _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 413 of 609 LNG Investigation indefinitely or aborted due to lack of interest from potential LNG off- takers/generators of electricity; o there is an urgent need to synchronize the schedule for implementation of the LNG Project with the plans for implementation of the power generation and cogeneration projects that will be the initial users of the natural gas to be produced from the Project.
This will require an assurance that projects are completed around the same time to enable the full utilization of the LNG facilities and that off-takers are identified at an early to [sic] facilitate any necessary agreements or guarantees required as pre-conditions to the installation of the LNG facilities and the selection of LNG suppliers.
Taking into account these extenuating circumstances, the MEM and the OUR discussed the most suitable procurement methodology…and have concluded that the Limited Tender Procurement methodology is the best way forward…” The NCC, by way of a letter which was dated 2010 September 17, responded to the foregoing letter from the Permanent Secretary, MEM, and stated, inter alia, the following: “The National Contracts Commission (NCC) considered on the matter 2010 September 17 via Round Robin method and taking into consideration the circumstances…offered no objection to the Ministry of Energy and Mining (MEM) proceeding with the use of the Limited Tender Methodology to procure a 480 MW of Generating Capacity pursuant to a 2010 Generation Expansion Plan.
The MEM should proceed in accordance with the GoJ Procurement Handbook of Public Sector Procurement Procedures of November 2008, Sub-Section No.

S-2040 pertaining to the use of Limited Tender Procurement Methodology, for the procurement of General Services and Goods.
The NCC is requesting that the Ministry provide a record of the firms that will be selected to submit quotations for the required Generating Capacity.” _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 414 of 609 LNG Investigation The Hon.
James Robertson, Minister of Energy and Mining, by way of Cabinet Submission 469/MEM-47/2010, which was dated 2010 September 16, requested that the Cabinet approve the foregoing based upon, inter alia, the following schedule: NO Decisions Timelines 1 Develop criteria for short-listing of Power Providers.

Criteria to satisfy GOJ’s procurement By close of business guidelines.
(Limited Tender Methodology) September 23, 2010 Use criteria to develop a shortlist of power providers from local and international generators of electricity (to be done within five days) 2 Issue Request for Proposal (RFP) accompanied by Term Sheet; Draft Terminal Use September 30, 2010 Agreement; Document outlining steps being taken to introduce natural gas to Jamaica and the proposed relationships between entities involved in the importation and delivery of natural gas to Jamaica and the proposed relationships between entities involved in the importation and delivery of natural gas and the expansion of the electricity capacity; Draft Power Purchase Agreement and Draft License 3 Return of The Term Sheet indicating declaration of an intent to bid November 1, 2010 4 5 NO 6 7 8 9 (To facilitate FSRU closing by November 15, 2010.
Necessary to secure price for FSRU; missed date will then result in substantial increase to the FSRU cost) Notify preferred FSRU provider of the responses under the Term Sheet November 5, 2010 Notify all Bidders issued with RFP (see 2 above) of prices under the Terminal Use Agreement November 19, 2010 (TUA) Deadline – return of Bids and other documentation/Bid Opening Identification of preferred Bidder(s) for generating capacity Decisions Signing of TUA Negotiations and path for start of construction Negotiation and Execution of PPA Environmental Impact Assessment Timelines January 3, 2011 February 2, 2011 February 7, 2011 120 days June 11, 2011 Permits Financing Activities 10 11 24 months for targeted construction Threshold criteria: • Off-taker to sign TUA whether or not a supply of gas is available • Off-taker’s willingness to provide a letter of credit • The credit rating of the off-taker • • • A willingness to sign for 20 years take or pay supply contract Provide comfort level Experience – having built, owned and operated a generating plant of no less than 60 MW units _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 415 of 609 LNG Investigation The Cabinet gave approval by way of Decision No.
35/10, which was dated 2010 September 20, for the OUR to use the Limited Tender Procurement Methodology to procure 480 MW of generating capacity from Liquefied Natural Gas for addition to the National Grid in accordance with the Generation Expansion Plan.
On 2010 December 15, the OUR issued a Media Release, which was entitled “O.U.R moves to open tender for additional 480MW of power” in which it stated, inter alia, the following: “The Office of Utilities Regulation (OUR) has amended its mode of procurement for the 480 MW of generating capacity from that of Limited Tender to Open Tender.

The Office conducted a review of the previous RFP process and concluded that it would be better served by using an open tender process.
The RFP issued on September 30, 2010 has therefore been withdrawn and the Office now invites proposals for the supply of the 480MW of generating capacity on an Open Tender basis.

Prospective bidders for the supply of the generating capacity have until March 31, 2011 to submit their documents.

Entities may provide one or more plants of varying configurations up to 480 MW with connections to the network of no greater than 120MW.
This new generating capacity being sought shall be base-load and is intended for the displacement of approximately 292 MW of aged plants with the remainder to provide for load growth…” Due to the fact that the increased generation capacity is associated the ‘FSRU LNG Project, the OCG will continue to monitor this component of the LNG Project in accordance with the provisions of the Government of Jamaica (GOJ) Handbook of Public Sector Procurement _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 416 of 609 LNG Investigation Procedures (Revised 2010 October which was made effective 2011 January).
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 417 of 609 LNG Investigation Evidence of Insider Information The OCG found that the former Chairman of the PCJ Board of Directors, Mr. Ian Moore, who was appointed on 2007 December 7, is presently a Director and Shareholder, of the company, CLNG, a partner of the Exmar Consortium, the ‘preferred bidder’ for the ‘FSRU LNG Project’.
It is also instructive to note that Mr. Conrad Kerr, former representative of the company, Merrill Lynch, is also a Director of the company, CLNG.

Of note, is the fact that the OCG found several pieces of correspondence which were circulated between Mr. Conrad Kerr, Mr. Ian Moore and Mr. Stephen Wedderburn, with respect to the LNG Project.
Based upon the foregoing, the OCG found it prudent to requisition Mr. Ian Moore and Mr. Conrad Kerr, in an effort to ascertain the nature of their relationship, the extent of their involvement and/or affiliation, if any, in the LNG Project and any other component of same, and, in particular, the ‘FSRU LNG Project’, during his tenure.
The OCG, in its requisition of 2010 October 4, which was addressed to Mr. Ian Moore, as Director of Caribbean LNG (Jamaica) Limited, posed, inter alia, the following questions: “What was the extent of your personal and/or official involvement and/or affiliation, if any, in the planning, conceptualization and/or implementation of the overall LNG Project, during your tenure on the Board of Directors at the PCJ?
What was the extent of your personal and/or official involvement and/or affiliation, if any, in the planning, conceptualization and/or implementation of the Build, Own and Operate (‘procurement’) component of the LNG Project, for the proposed Financing, Development, Ownership, Operation of a FSRU LNG Re-gasification Terminal and Natural Gas Transmission System in Jamaica, during your tenure on the Board of Directors at the _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 418 of 609 LNG Investigation PCJ?”218 Mr. Ian Moore, in his response to the OCG’s Statutory Requisition, which was dated 2010 December 3, stated the following: “None.
There was no approved and/or active LNG Project during my tenure at the PCJ.
A number of companies made unsolicited overtures to the PCJ to develop LNG facilities in Jamaica during this time, and discussions were held with these companies in furtherance of the ongoing debate among governmental stakeholder parties on the merits of coal versus Liquified Natural Gas (LNG) as an energy source in Jamaica…”219 (OCG’s Emphasis) The OCG, in its requisition of 2010 October 4, which was addressed to Mr. Ian Moore, as a Director of Caribbean LNG (Jamaica) Limited, further posed, inter alia, the following question: “Please indicate at what stage of the LNG Project, and/or any component of same, in particular, the proposed Financing, Development, Ownership, Operation of a FSRU LNG Re-gasification Terminal and Natural Gas Transmission System, were you dismissed from the PCJ Board of Directors.
In addition, please provide documentary evidence, if possible, to substantiate your response(s) and/or assertion(s).”220 Mr. Ian Moore in his response to the OCG’s Statutory Requisition, which was dated 2010 December 3, stated the following: “There was no approved and/or active LNG Project during my tenure at the PCJ.

The entire period of my tenure was consumed by an ongoing debate between the merits of coal and LNG as an energy source.
The Minister of Mining & Energy essentially terminated any possible project start-up by announcing, in the 2008 Sectoral Budget Presentation, that LNG will not be pursued and that the Government had decided in 218 OCG’s Requisition to Mr. Ian Moore, Director, CLNG, which was dated 2010 October 4.

Question #3 & 4 219 Response from Mr. Ian Moore, Director, CLNG, which was dated 2010 December 3.

Response #3 & 4 220 OCG’s Requisition to Mr. Ian Moore, Director, CLNG, which was dated 2010 October 4.
Question #6 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 419 of 609 LNG Investigation favour of coal energy…”221 The OCG conducted a review of the Minutes of the Meetings of the PCJ Board of Directors, for the period in which Mr. Ian Moore was appointed the Chairman.

The referenced minutes revealed that the LNG Project and/or any other component of same were deliberated upon in two (2) distinct meetings.
These are as follows: i.

The Minutes of the Regular Meeting of the PCJ Board of Directors, which was held on 2008 May 27, stated, inter alia, the following: “The Chairman read a letter from the Belgian government to the Prime Minister indicating that the Belgian Government was willing to buy the carbon credits from the LNG project for 100M Euros and was willing to upfront 50% of the sum assuming there are only three (3) off-takers namely JEP, Jamalcoa and a gasified power station at Old Harbour.
Further the amount could be increased to 150M Euros if all the possible off-takers came on board.

The Chairman noted that if the FSRU route was taken then 50% of the project would be paid for by proceeds from the carbon credits and 100% if all the bauxite companies came on board.”222 ii.
The Minutes of the Regular Meeting of the PCJ Board of Directors, which was held on 2008 June 30, stated, inter alia, the following: “Enquiries were made as to whether the LNG project was being delayed because of a lack of support from the PCJ Board or the Government.
The Chairman noted that the Project has the support of the Board but would also need the support of the Ministry of Energy and the Office of the Prime Minister.”223 Based upon the foregoing, the OCG found that the LNG Project was halted during Mr. Moore’s 221 Response from Mr. Ian Moore, Director, CLNG, which was dated 2010 December 3.

Response #6 222 Minutes of the Regular Meeting of the PCJ Board of Directors which was held on 2008 May 27.

Pg.
Pg.

8 223 Minutes of the Regular Meeting of the PCJ Board of Directors, which was held on 2008 June 30.

Pg.

10 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 420 of 609 LNG Investigation tenure, as the Chairman of the PCJ Board of Directors.
There was no evidence found in the Minutes of the PCJ Board of Directors, during Mr. Moore’s tenure, that any form of discussion was held in respect to the LNG Project, as an alternative source of energy.

As such, the OCG found no evidence to suggest that approvals and/or recommendations were made, by the then PCJ Board of Directors, in regard to the LNG Project.
However, the OCG found evidence in the form of several email correspondence from Mr. Stephen Wedderburn to Mr. Ian Moore, Mr. Conrad Kerr, amongst others, which indicated that preparations were being made and information on the LNG Project were being shared on the project during Mr. Moore’s tenure.
These are as detailed overleaf: _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 421 of 609 LNG Investigation Date Sender/Receiver of Subject of Information Disclosed Correspondence Correspondence 2007 December Email from Mr. Stephen Acquisition of land 14 Wedderburn to a Gabriel for LNG Terminal Henn (Windalco) and copied to Mr. Ian Moore and other representatives at Windalco 2007 December Email from Mr. Stephen LNG Project 21 Wedderburn to Mr. Ian Timetable Moore “Please see attached letter reaffirming our interest in the acquisition of land at Port Esquivel for the LNG terminal.
the project.

In respect of the recent discussion on the possibility of supplying LNG, we are working with a threshold of 750,000 tonnes of LNG per annum as the minimum volume to facilitate implementation of the observation I make LNG that…(Windalco and sister company Alpart) are capable of taking that volume.

You therefore are in a unique position to guarantee implementation of the LNG project…” “Please see attached the Project Schedule chart submitted by Merrill Lynch.
I know you won’t be satisfied with it as it doesn’t project having LNG being distributed before late 2012.

2008 January 9 Email from Mr. Stephen Wedderburn to Mr. Ian Moore, Mr. Conrad Kerr, Mr. Stephen Hanan (MLCI), Mr. Andrew Gray (MLCI), et al.

2008 January 23 Email from Mr. Conrad Kerr to Mr. Stephen Wedderburn and copied to Mr. Ian Moore et al.
Merrill want [sic] to have a conference call with you on Monday morning to discuss this and the other documents…” New Exmar Concept “Please see attached a copy of a presentation on an adjusted proposal from Exmar.
To minimize the logistical problems and delays that would be caused by a vessel having to dock in Port Esquivel for a partial cargo discharge, Exmar are proposing a system based on ship-to-ship transfer of LNG…If Merrill is interested, I could arrange a conference call with the Exmar group while they are here, or if you have any issues you would [sic] me to raise with Exmar please let me know.” “From reading your note it seems that we are in agreement that regas “feasibility”… needs to be done before we make a final regas selection.
I would suggest that the feasibility should include both the Exmar solution and standard land based regas.
If we can agree on this point I do not think we have a problem reflecting Exmar as the “base case”, as that is just a designation until we are both technically comfortable with it and it is proven to be a better solution (cost and time) than onshore.” Exmar _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 422 of 609 LNG Investigation Date Sender/Receiver of Subject of Information Disclosed Correspondence Correspondence 2008 January 23 Email response from Mr. Exmar Stephen Wedderburn to Mr. Conrad Kerr copied to Mr. Ian Moore et al.
2008 January 23 Email from Mr. Stephen Role of Exmar Wedderburn to Mr. Stephen Hanan and copied to Mr. Conrad Kerr, Mr. Andrew Gray (GMI-Latin America COO), Mr. Ian Moore, et al.

“…The ‘coal lobby’ is in retreat, but I don’t think they have given up completely and you are going to have persons constantly seeking reasons to criticize the LNG project.
We need to get the regas feasibility analysis out of the way as quickly as to facilitate possible and concentrate on getting the MOU signed as quickly as possible.” this we need to “To clarify the role of Exmar, PCJ wants the Exmar proposal to be treated as the base case for the implementation of the LNG Project in Jamaica and the proposal being developed for the Prime Minister should reflect this.
Therefore Exmar becomes more than just one of a number of alternatives, but their selection as infrastructure provider would still be subject to due diligence.

If the due diligence reveals that there are any fundamental flaws to the Exmar proposal or that it is not the most cost-effective proposal then we would be prepared to look at other alternatives.
We would want to have due diligence on Exmar’s proposal commencing immediately so that by the time we are prepared to sign definitive agreements, we would know whether we are sticking with Exmar or not.

We are aware that in the floating terminal case, because the capital outlay is relatively small a standard return on capital approach will not give PCJ and ML the type of compensation we want.
However, we believe that we need to look more at earning a margin on each btu of gas as the main means of compensation.
In fact please note that some people in Jamaica have been suggesting that ML is pushing a high capital cost approach merely to get a high return, so we want to avoid as much as possible leaving ourselves open to such criticisms.” _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 423 of 609 LNG Investigation Date Sender/Receiver of Subject of Information Disclosed Correspondence Correspondence 2008 January 23 Email from Mr. Conrad Exmar Kerr to Mr. Stephen Wedderburn, et al.
“I am aware of the Exmar discussion and I wanted to make sure we are clear on the positions of ML and PCJ on the subject…Our understanding on the call with you and Ian after the Ministry offsite was that the PM supported LNG and the ML sole source solution.
Also, we heard that you and Ian were keen to have Exmar included as regas option for the project to consider instead of just onshore [sic] solution…It is our position that the best way to ensure the project has the ability to move forward quickly is to stay with as much standard and proven design as possible…As we have mentioned in the past one of the benefits to sole sourcing the project together is that we can control the contracting risk and place it in the appropriate places…With the above said I want to emphasize that we are happy to work with Exmar as an option and give them every chance to be the ML/PCJ choice of regas solution… If you recall about 6 months ago we proposed to enter into a technical feasibility phase… We suggest that this is still needed if we are going to properly evaluate the several Exmar Solutions vs Industry standard onshore regas…” 2008 January 28 Email from a Jacques EXMAR Belgium Nyssen, Commerzbank to Mr. Stephen Wedderburn the Belgian “I send you herewith our proposal for the financing of the dredging works and the construction of the jettee by companies Dredging International and BESIX related to the LNG regas facility at Port Esquivel.
This is indicative proposal for a Belgian financing is supported by the Belgian Government as part of further developping [sic] the good relationship between our both countries.” the aim of _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 424 of 609 LNG Investigation Date Sender/Receiver of Subject of Information Disclosed Correspondence Correspondence 2008 February 6 Email from Mr. Stephen Jamaica LNG Wedderburn to Mr. Conrad Pipeline Schematic Kerr (MLCI), Mr. Stephen and an attachment of Hanan (MLCI), et al.
and same.

copied to Mr. Bart Lavent (Exmar) and Mr. Ian Moore “In a conference call yesterday I was asked to prepare a pipeline diagram.

Please see attached a rough schematic of what the pipeline network would look like if all the proposed parties to the end-user MOU take gas… The node near Montego Bay is the JPS Bogue Power Station which currently has a 120 MW combined cycle plant and 100 MW of simple cycle combustion turbines.
If gas is available the plan is to add at least one more combined cycle plant.

The node near Port Kaiser is the Alpart Alumina Refinery.

Alpart’s current is fuel oil usage equivalent to 600,000 tonnes of LNG per annum.

The node near Mandeville is Windalco Kirkvine.

Kirkvine’s current fuel oil usage is equivalent to about 150,000 tonnes of LNG per annum.

The node near May Pen is the Jamalco Alumina Refinery.

Jamalco’s current is equivalent to about 300,000 tonnes of LNG per annum.
With proposed expansion, Jamalco’s energy usage would increase to the equivalent of about 600,000 tonnes of LNG per year.

fuel oil usage The node near Portmore is the JPS Old Harbour Power Station and the Jamaica Energy Partners power barges.

JPS has about 240 MW of steam turbine units at Old Harbour and JEP has 125 MW of medium speed diesel units.

The node near Linstead is the Windalco Ewarton Alumina Refinery.
Ewarton’s current fuel oil usage is equivalent to 150,000 tonnes of LNG per annum, but there are plans to expand and to export 60 to 90 MW to the national grid.

Windalco has claimed their fuel usage would go up to the equivalent of 700,000 tonnes of LNG, but this calculation has not been verified.
The Mustang FEED included pipeline estimates for _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 425 of 609 LNG Investigation Port Esquivel to JAMALCO and Port Esquivel to Old Harbour and Kingston.

We are no longer planning to go into Kingston, but as a rough approximation the cost that would have been incurred in taking the pipeline to Kingston is equivalent to the cost of taking it to Windalco Ewarton.
Therefore the cost information in the model essentially covers the three easternmost nodes (Ewarton, Old Harbour and Jamalco) The Jamalco to Kirkvine leg had been estimated at about $20 million by KBR in 2003.

There has not been any more recent estimate.
There have never been estimates for pipelines to Bogue and to Alpart, but Exmar is looking at providing some estimates this week.” _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 426 of 609 LNG Investigation Date Sender/Receiver of Subject of Information Disclosed Correspondence Correspondence 2008 February 12 Email from Mr. Bart Lavent Presentations to Mr. Stephen Wedderburn Consortium – and Mr. Ian Moore attached Exmar Jamaica LNG Project_latest 2008 February 12 Email from Mr. Stephen Jamaica LNG Wedderburn to Mr. Stephen Demand – attached Hanan (MLCI) and copied Jamaica – Potential to Mr. Conrad Kerr LNG Distribution (MLCI), Mr. Ian Moore, Network; LNG Mr. Bart Lavent (Exmar), et Demand al.
2008 February 27 Email from Mr. Stephen Jamaica LNG Wedderburn to Mr. Ian Terminal – Hoegh Moore which was copied to FSRU – attached Dr. Ruth Potopsingh (PCJ), document entitled Stephen Hanan (MLCI), “Portland Bight” Mr. Conrad Kerr (MLCI); Mr. Andrew Gray (GMI – Latin America COO), et al.

“…as discussed yesterday evening, please find an overall presentation of the Belgian consortium solutions.

We also added the CDM efforts proposed by the Belgian Government.
As you both know, the LNG project has been filed for the Belgian CDM tender.

It has passed the first round and is eligible for round 2.

We are talking here about 20 Mio €/year for the next 10 years to be shared between the different stakeholders.” “As discussed on the call yesterday, please find attached some information on the existing and potential the various prospective end-users in Jamaica.” future LNG demand at “Please see indicative proposal from Hoegh LNG.
As I have mentioned before, it was Alcoa that first introduced the FSRU concept and recommended Hoegh to us..As you can see the Hoegh proposal now is that we could have two LNG carriers, one an FSRU and the other only a storage unit.

Thus the Hoegh proposal would have significantly more storage than the Exmar proposal -- on the order of 250,000 cubic metres.

They indicate a project delivery time of 2 years.


It is of interest that Hoegh has chosen the same site for locating the FSRU as Exmar, even though they do not have knowledge of the Exmar proposal.
Hoegh’s proposal is for the floating equipment only and would not jetty and pipelines…” include the _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 427 of 609 LNG Investigation Date Sender/Receiver of Subject of Information Disclosed Correspondence Correspondence 2008 February 13 Email from Mr. Stephen Jamaica LNG Wedderburn to a Graeme Project McDonald to “…I have become aware recently that there are some people trying to introduce Golar to the Government.
I have clarified the Minister involved that we have been in touch with you for some time.

Please note that there was some confusion on this side as the impression was given that your group was interested in supplying LNG as opposed to the infrastructure.

As you can imagine there is great interest in talking to anyone who can supply LNG…We have been talking with a potential partner who would take responsibility for the supply arrangements and also become an equity partner in the project.
PCJ is recommending to the Government that it formally enters into an alliance with this partner.

Since the impression had been given that your group could supply LNG it was felt by your contacts here that taking PCJ’s recommended path would lock Golar out of the project.

Assuming that the Government approves this proposed alliance we would probably scrap the exercise that was started last year and do a fresh procurement under the aegis of our joint venture partner.
You will have picked up in the press that in all of this we are re-evaluating the choiice [sic] between onshore and offshore…In order to accelerate the project, if we go the FSRU route we are likely to take a more strategic route to identifying the FSRU provider rather than the typical government procurement route i.e.

we may identify a couple of the most likely candidates and enter into some form of direct negotiation.
In this regard, please note that one of your competitors has done a lot of background work on its own initiative and has effectively prepared its proposal already, even in the absence of an invitation for proposals.

This competitor therefore has a headstart on the other companies… I assume that you will be at Gastech in March.
The new PCJ Chairman and I will be there…He is very interested combined FSRU/Power the Generation concept.” in _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 428 of 609 LNG Investigation Date Sender/Receiver of Subject of Information Disclosed Correspondence Correspondence 2008 February 14 Email from Mr. Stephen Jamaica LNG Wedderburn to a Graeme Project McDonald 2008 May 13 Email from Mr. Stephen ML Thoughts on Wedderburn to Mr. Ian Jamaica LNG – Moore and copied to Dr. attached document Ruth Potopsingh and Mr. entitled ‘Thoughts’ Carlton Davis “As I mentioned to you my Chairman was very interested in your Floating Energy Solution concept.
He has asked me to get some outline indicative information on this: - How soon could an [sic] FES be delivered?

- What would it cost, both in terms of the upfront capital outlay and the likely range of daily charges for chartering the FES?” “Please see attached a note from Merrill Lynch outlining their current thoughts on the Jamaican Project and their involvement in it... …Please let me know what time tomorrow will be good for you to have a conference call with Merrill Lynch.
Arising out of the last Energy Committee Meeting I had invited Merrill Lynch to be in Jamaica next week, to be available to meet with the Energy Committee…To highlight and elaborate some of the key points being made by Merrill Lynch: 1.

They want the GOJ to clearly and definitively state that LNG is going to be the primary energy diversification strategy.

2.
2.

They believe that PCJ has been overly optimistic on possible implementation timeframes and want us to accept what they see as a realistic timeframe, essentially 36 months plus whatever time it takes to get to Final Investment Decision.

3.

Merrill wants us to commit to an onshore terminal which they see as the most tested and reliable solution.

They consider the Exmar proposal to be experimental and are not at all keen on pursuing it.

4.
4.

Merrill now wants to remove all carveouts and to be fully involved in all LNG supply discussions, including with Venezuela, i.e to have no carveouts at all.
Whilst it would be excellent if we could have coordination between Merrill and PDVSA, such a combination won’t be an automatic fit…” _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 429 of 609 LNG Investigation Date Sender/Receiver of Subject of Information Disclosed Correspondence Correspondence 2008 May 16 Email from Mr. Stephen Jamaica Trip Wedderburn to Mr. Patrick Dallas (Golar) and copied to Mr. Ian Moore and Mr. Dwight Lewis “…I certainly think Golar is one of the credible FSRU providers and they are one of the companies I have been courting…I admit though that the current discussions are achieving what I did not, which is to get the Ministry interested in and excited about LNG and the FSRU concept.
is a However, I want to stress that Golar and what they are offering are not unique.

There are four companies that I consider the toprunners for providing an FSRU in Jamaica – Golar, Exmar of Belgium, Hoegh of Norway and MISC of Malaysia.

fifth capable company who has [There expressed interest in providing the FSRU for Jamaica -- Suez -- but I would not consider Suez, unless they also included LNG supply, which they have, in the deal.
]… All of these companies would finance the FSRU and I have indicated to them that anyone who can bring LNG to the table will be virtually guaranteed the front runner position.

My personal ranking would be Exmar 1st, Hoegh 2nd, and Golar and MISC tied for 3rd.

Exmar have dived into this project with great enthusiasm.
Exmar have visited Jamaica about 8 times as opposed to once or twice for each of the other firms…Without waiting for MOUs or any documentation they have invest [sic] a lot of engieering [sic] resources in designing a solution for the Jamaica project and they have proposed a turnkey approach which includes not just the provision of the FSRU, but the construction of [sic] rest of the infrastructure as well.
I am aware that Exmar and Hoegh have been actively making approaches to LNG suppliers on Jamaica’s behalf in the last year, but without success so far…” _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 430 of 609 LNG Investigation Date Sender/Receiver of Subject of Information Disclosed Correspondence Correspondence 2008 June 2 Email from Mr. Bart Lavent Exmar Update to Mr. Stephen Wedderburn 2008 June 2 Email from Mr. Stephen Exmar Update Wedderburn to Mr. Ian Moore and copied to Mr. Dwight Lewis 2008 June 2 Email from Mr. Stephen Belgium LNG Wedderburn to Ms. Sancia Consortium -- Templer and copied to Mr. Commerzbank Ian Moore financing offer “…I just wanted to give you an update on different topics: 1.
Our LNG Floating Liquefaction is progressing well.

We hope in the next month to sign an agreement…I will send you this week a presentation tailor made for Venezuela and the Caribbean region.

2.

Hon Min Mike Henry, Minister of Transport & Works – Jamaica is coming to Germany next week Friday 13th.

I will meet with him to discuss our Jamaican cadet program (together with CMI) and the LNG project… 3.

Ambassador Portocarero is in Belgium this week…He already updated me regarding the CO2 consultant process.
I would appreciate your views and insights on this matter.” “Please see update from Bart.

The recruitment of Jamaican cadets is another positive for Exmar -- I know that they have put a lot of effort in establishing linkages with CMI.
It was only recently that Bart told me that Exmar was pursuing floating liquefaction, but he is now suggesting that they may sign a floating liquefaction contract as soon as next month.” “Please see attached the financing offer that was submitted by Commerzbank earlier this year.

The indicative interest rate at the time was 5.09 percent.
Commerzbank had suggested they would investigate the possibility of grants and subsidies from the ONDD, but there was no definitive commitments in that regard.” that _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 431 of 609 LNG Investigation Date Sender/Receiver of Subject of Information Disclosed Correspondence Correspondence 2008 June 3 Email from Mr. Bart Lavent CO2 credits: latest “…I refer to phone call of yesterday.
to Mr. Ian Moore and Mr. information received Stephen Wedderburn the meantime I was able within person In responsible administration.

A. Belgian administration to contact the Belgian the Unfortunately the answers were not very positive: Extension of the deadline: 10th of September exceptions will be granted.

is really the deadline.


No New tender: This is the last tender that the Belgian government will launch… Based on this information I would recommend to include the LNG project into September 10th deadline… C. Recommendations To summarize I would recommend the following: 1.

Nominate a consultant as soon as possible for both projects.

The consultant can then start working on the Project Design Document (PDD).

2.
2.

There will be a need to feed the consultant with facts and figures; this will involve PCJ and the contractors.

3.

Prepare the Letter of Approval (already done for the Wigton wind farm field) 4.
Nominate the DOE…as they will be responsible for verifying the PDD and making the validation report…” _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 432 of 609 LNG Investigation Date Sender/Receiver of Subject of Information Disclosed Correspondence Correspondence 2008 June 3 Email from Mr. Stephen FW: CO2 credits: Wedderburn to Mr. Ian latest information Moore and Ms. Sancia received Templer 2008 June 5 Email from Mr. Bart Lavent Floating to Mr. Ian Moore and Mr. liquefaction: way Stephen Wedderburn forward for Jamaica “Please see note from Bart following up on our discussions yesterday.
He is essentially saying that we need to move full speed ahead to meet the September deadline on the LNG carbon credit application.” “…I can only (re)stress that time is essential for the CO2 issues.

It would be a shame to loose [sic] that money which can finance the LNG project.

However the purpose of this email is different.


As you night know, Exmar is working hard to build the first floating liquefaction terminal in the world… We believe that this floating liquefaction is the key to solve the Jamaican issue of LNG supply…we can unlock smaller fields and prepare the LNG supply to Jamaica.
In that way we control the full value chain (liquefaction, shipping, regas, CO2 and sales) and we will no longer have the difficult discussions with the possible LNG suppliers stating “not interested in partial offload, no ship to ship, Henry HUB+pricing,…” It is a relative fast track solution as the LNG will be produced end 2012.
If Jamaica wants, it can already start buying some LNG earlier (2011) on a spot basis before the floating liquefaction kicks in…” Force Majeure issues, _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 433 of 609 LNG Investigation Date Sender/Receiver of Subject of Information Disclosed Correspondence Correspondence 2008 June 5 Email from Evelien Van Message from “re Port Esquivel LNG terminal Haecke to Mr. Ian Moore Ambassador and copied to Mr. Bart Portocarero Lavent, Jacques Nyssen, et al.
I was glad to have a quick word with you in between our resp.

meetings with the Prime Minister last week.

I know you have been in touch with Exmar in the meantime.

I have had extensive contacts with all parties on the Belgian side over the last two days here in Brussels.

The situation now speaks for itself.

The Embassy has been lobbying all it could.

The ball is in your camp.


If the consultant is not hired in time for the (non negotiable) deadline of Sept. 10 for the CDM submission, I cannot devote any more time and attention to the project.
2008 August 6 Email from Mr. Stephen Hoegh LNG – Visit Wedderburn to Mr. Ian to Jamaica Moore and Dr. Ruth Potopsingh for all I would deeply regret the loss of opportunity for Jamaica and of credibility involved, including us in Belgium who have been very proactive and have stuck our necks out at some risk to our connections and careers.

I am sure you are aware of this and sympathize with it.
I understand the political decision making process is not an easy one and does not come at an easy moment in Jamaica, but the world doesn’t always wait for us and circumstances will never be one hundred percent ideal…” “Although Hoegh was to introduce the floating LNG concept to Jamaica they have fallen behind Exmar and Golar.

However, they have links with Alcoa and I had advised them that they work through Alcoa to set up a visit to Jamaica and get themselves back in the picture.
The advantage is that they are much more likely to get an audience with the Minister if its Alcoa that makes the request rather than PCJ and the very fact of Alcoa requesting a meeting on LNG will negate the Minister’s oft stated claim that the bauxite companies are not interested in LNG.” the first company *MLCI – Merrill Lynch Based upon the foregoing emails, the OCG found that during Mr. Moore’s tenure as the _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 434 of 609 LNG Investigation Chairman of the PCJ Board of Directors, he [Mr. Moore] and Mr. Stephen Wedderburn were actively engaged in lobbying for the introduction of LNG to Jamaica.
In this regard, there were several meetings and correspondence, with various LNG stakeholders including Merrill Lynch, Hoegh LNG, Golar LNG and Exmar Marine NV.

The OCG has found that in one instance, Mr. Stephen Wedderburn went as far as to rank the LNG players, based upon his perception of their capabilities to carry out the LNG project.

Of note, is the fact that Mr. Wedderburn indicated a clear preference for Exmar Marine NV.
It is also instructive to note that one of the then Merrill Lynch representatives which was involved in discussions with Mr. Moore and Mr. Wedderburn was Mr. Conrad Kerr, a current Director and Shareholder of CLNG and business partner of Mr. Ian Moore.
Further, the emails have revealed that there was significantly more communication between Mr. Ian Moore and Mr. Stephen Wedderburn, with respect to Exmar Marine NV and its potential offerings than all of the other companies with which discussions were being held.
It is instructive to note that Mr. Wedderburn indicated that Exmar Marine NV invested significant resources in developing a proposal for Jamaica, and that the PCJ wanted to use the Exmar Marine NV proposal as a ‘base case’ for the implementation of the LNG project in Jamaica.

Based upon the emails, the OCG also found the following: i. ii.
There is also evidence to suggest that Mr. Bart Lavent of Exmar Marine NV, was informing Mr. Stephen Wedderburn of certain strategic steps which should be taken for the LNG project to materialise.

It is also instructive to note that Mr. Ian Moore, during his tenure as Chairman of the PCJ Board of Directors, was copied on the majority of the emails from Mr. Stephen Wedderburn, in regard to the LNG Project.
Hence, the OCG found that during Mr. _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 435 of 609 LNG Investigation Moore’s tenure, Mr. Stephen Wedderburn informed Mr. Moore, at every step of the way, of the progress of the LNG Project, in which his input was required in most instances.

iii.
iii.

Of note, is the fact that both Mr. Ian Moore and Mr. Stephen Wedderburn, appeared to have been aggressively working to bring LNG to Jamaica during the time in which Mr. Wedderburn asserted that LNG was ‘halted’ because the then Minister, Mr. Clive Mullings, was promoting coal.

iv.

Based upon the email of 2008 February 6, the OCG found that Mr. Stephen Wedderburn was instructed to prepare a diagram of the pipeline network throughout the island.
The referenced email was copied to Exmar Marine NV, representatives from Merrill Lynch, inclusive of Mr. Conrad Kerr, and Mr. Ian Moore, as the representative from the PCJ.

The OCG has seen no evidence to suggest that, unlike Exmar Marine NV, the other potential bidders were made privy to this information.
v. The OCG also found that Mr. Wedderburn informed Golar LNG of his personal ranking of four (4) of the entities which were involved in the pre-qualification exercise which was undertaken in 2007 by the PCJ and which were subsequently invited to tender in 2009 November.

Of note, is the fact that Mr. Wedderburn ranked Exmar Marine NV as the number one (1) company and used Exmar Marine NV and its invested interest to compare the other entities.

vi.
vi.

Mr. Bart Lavent of Exmar Marine NV, hosted several meetings with Jamaican Public Officials/Officers, in which discussions were held with respect to Exmar Marine NV’s progress and the LNG prospects for Jamaica.

The OCG also found that (a) Mr. Stephen Wedderburn sent several emails to Mr. Ian Moore, during his tenure at the PCJ, informing him of meetings and other forms of communications and that (b) Mr. Ian Moore convened other meetings in regard to the LNG Project.
In this regard, the OCG found the following: _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 436 of 609 LNG Investigation Date Sender/Receiver of Subject of Information Disclosed Correspondence Correspondence 2007 December Email from a Noam Fuel Oil Equivalent “Was good to see you last week, we 10 Berk to Mr. Stephen Numbers – attached thought that the meetings with the end- Wedderburn and Mr. Ian document entitled users were productive and a good step Moore and copied to Mr. “Summary LNG forward in this process.
Conrad Kerr, et al.

Pricing” As requested, we have added the fuel oil equivalent prices for the delivered LNG.

The attached Excel spreadsheet has these numbers.

As you can see, the fixed prices range from approx.

$53.00 to $63.50 per barrel… Finally, we took a stab at calculating the additional cost, on a $/kwh basis, of re- powering the existing boiler-fired fuel oil units (Old Harbour and the bauxite company units) to gas-fired combined cycle power plants.
Assuming a capital cost of $800 per kw of capacity, VOM of $2.50/mwh and FOM of $0.87/MWH, 95% capacity utilization, a required return of 12-13% on this capital investment, and no terminal value after 20 years, one would need to charge an additional 1.9 to 2.0 cents per kwh to support this investment…” _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 437 of 609 LNG Investigation Date Sender/Receiver of Subject of Information Disclosed Correspondence Correspondence 2008 January 2 Email from Mr. Stephen LNG Meetings “Andrew Gray of Merrill Lynch will be Wedderburn to Mr. Ian here next week and would like to meet with Moore us…Also Exmar and their construction partners, Besix and Dredging International, have requested a meeting the following week and I am tentatively scheduling that for Tuesday 15 January at 10:00 a.m.
Please confirm that the time is okay for you.” 2008 January 23 Email from Mr. Conrad Role of Exmar “Steve Hanan just phoned me to say he has Kerr to Mr. Stephen Wedderburn and Mr. Stephen Hanan copied to Mr. Ian Moore, et al.

been involved in a car accident.


He is OK but requests the Exmar call be delayed until 10:30 Houston time to allow him to make it into the office.” 2008 February 20 Email from Pooya Alia, Meeting in London “Dear Ian, Energy Utilities & on Friday 22 Infrastructure, Market & February Thank you very much for your time Value Advisory, PricewaterhouseCoopers LLP, to Mr. Ian Moore yesterday.
Further to our discussion, Michael Hurley, who heads the LNG team in London and is also the PwC global LNG leader, is very keen to meet you on Friday as well.

Can we arrange a time after 3 pm?

We could come directly to your hotel if that is more convenient for you.” 2008 February 29 Email from Pooya Alia, Meeting in London “…It was a pleasure to meet with you in Energy Utilities & on Friday 25 London on Monday.
As promised, please Infrastructure, Market & February find attached our proposal which we hope Value Advisory, PricewaterhouseCoopers LLP, to Mr. Ian Moore to be able to discuss with you on your next visit through London.
I also attached our LNG credentials in electronic format.” _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 438 of 609 LNG Investigation Date Sender/Receiver of Subject of Information Disclosed Correspondence Correspondence 2008 March 3 Email from Mr. Ian Meeting in London “Thanks, I will be looking at this and Moore to from Pooya on Friday 25 sending a response by the week’s end.” Alia, Energy Utilities & February Infrastructure, Market & Value Advisory, PricewaterhouseCoopers LLP 2008 March 8 Email from Mr. Stephen Jamaica LNG “I hear Golar met recently with Patrick Wedderburn to a Project Dallas, advisor to Minister Mullings.
Graeme McDonald Patrick will not join Ian Moore and me in (Golar) Bangkok.
Let me know when would be a convenient time to meet in Bangkok…” 2008 May 5 Email from Mr. Ian Jamaica Site Visit “Patrick, I am in support of this visit and, I Moore to Patrick Dallas am available today from 3:30pm for this (Golar) and the LNG position paper after which we will have a meeting with Amerossi at 5pm.” 2008 July 23 Email from Mr. Stephen Saturday Meeting “My assistant mentioned that the PM will Wedderburn to Mr. Ian have a meeting Saturday, but I didn’t get Moore any details.
Can you tell me what it is about?...” 2008 July 23 Email from Mr. Ian Saturday Meeting “Try to came [sic] back early this is the Moore to Mr. Stephen decision making meeting for lng vs coal” Wedderburn 2008 July 23 Email from Mr. Stephen Saturday Meeting “I have began checking possible Wedderburn to Mr. Ian Moore copied to Dr. Ruth Potopsingh arrangements…likely to cost…US$500 to be able to get back home in time for the meeting.
Please confirm that PCJ would reimburse me…” 2008 July 23 Email from Mr. Ian Saturday Meeting “Ok did you get an invite?

If so yes.
If so yes.

Moore to Mr. Stephen I did not want you to copy ruth on this.” Wedderburn _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 439 of 609 LNG Investigation Date Sender/Receiver of Subject of Information Disclosed Correspondence Correspondence 2008 July 23 Email from Mr. Stephen Saturday Meeting “Yes, I was invited.

So I will proceed to Wedderburn to Mr. Ian make the arrangements.
Moore Sorry about copying Ruth.

However, please note that she often complains about not being informed of things and I was just trying to cover that base.” Based upon the email of 2008 July 23, the information which has been presented to the OCG suggests that there was an obvious intent, for whatever reason, on the part of Mr. Ian Moore, to withhold information from Dr. Ruth Potopsingh, the former Group Managing Director, PCJ.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 440 of 609 LNG Investigation Possible Conflict of Interest Mr. Stephen Wedderburn, LNG Project Coordinator Mr. Zia Mian, Director General, OUR, in his response to the OCG’s Statutory Requisition of 2010 September 10, which was dated 2010 October 1, stated that after Mr. Wedderburn demitted office in 2008, “I understand that he proceeded to start working closely with Exmar, a company that had remained actively interested in Jamaica for the supply of FSRU unit.
In March 2009, Mr. Wedderburn sent an email to me…”224 The referenced email, which was dated 2009 March 26, stated, inter alia, the following: “If you are able to talk with the Prime Minister, please encourage him not to go down the coal path.

I can state categorically that LNG is available and companies that would have arrogantly dismissed any approach by Jamaica last year, would now be more than willing to talk to Jamaica.
I have contacts who can initiate serious LNG supply meetings with existing suppliers, but they have to be sure that the Government is willing to move forward and will not just waste their time as has happened in the past.

I had mentioned to you that I am in Colombia.

The reason I am here is that I am providing assistance to a project to liquefy gas here.
We expect to have an agreement signed next week to proceed with the FEED… Again, if you get the chance please stress to the Prime Minister that there are real options for gas.

However, if he were to depend on Minister Mullings to procure gas for Jamaica it will never happen.

As I said to Bruce, we can get the gas from established suppliers, but the PM has to become personally involved.”225 (OCG’s Emphasis) 224 Response from Mr. Zia Mian, which was dated 2010 October 1.

Response to Question #1.


225 Email from from Mr. Stephen Wedderburn to Mr. Zia Mian, which was dated 2009 March 26.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 441 of 609 LNG Investigation Mr. Zia Mian, in his response to the OCG’s Statutory Requisition of 2010 September 10, which was dated 2010 October 1, also stated that “…I forwarded his email to Dr. Carlton Davis the then Cabinet Secretary who also had an interest in LNG matters.
With the change of Minister at the MEM to the Honourable Minister James Robertson, LNG found a new supporter.

The new Minister wished to bring the LNG to Jamaica before the next general elections in 2012…”226 Based upon the foregoing, the OCG found that even after Mr. Stephen Wedderburn demitted office at the PCJ, he was still promoting LNG as the preferred energy choice for Jamaica.
It is instructive to note that during the time Mr. Wedderburn was not employed to the PCJ, he was involved in a LNG liquefaction project in Colombia in which Exmar Marine NV was also a party.

In this regard, upon being re-engaged by the MEM in 2009 August, Mr. Stephen Wedderburn, by way of an email to Dr. Ruth Potopsingh, the then Group Managing Director, PCJ, which was dated 2009 September 6, disclosed that “…I have been involved in a project to develop floating LNG liquefaction in Colombia.
Exmar is also involved in this project, but I do not have any commercial relationship with Exmar.

Nevertheless, if the project is successful both Exmar and I will benefit.

My involvement in the project was on a success fee basis and even where I have ceased active involvement in the project, I will still have a financial interest…” Further, Mr. Zia Mian, in his response to the OCG’s Statutory Requisition of 2010 September 10, which was dated 2010 October 1, stated that “…Mr.
Wedderburn was brought on board to spearhead the project.
At a meeting at Jamaica House, the Minister, and Messrs. Wedderburn and Moore strongly recommended that a negotiated deal with Exmar could deliver the LNG to Jamaica on a fast track basis…”227(OCG’s Emphasis) The OCG found that Mr. Stephen Wedderburn was integrally involved in the drafting of the RFP and was the primary point of contact with the potential bidders during the tender process for the 226 Response from Mr. Zia Mian, which was dated 2010 October 1.

Response to Question #1.


227 Response from Mr. Zia Mian, which was dated 2010 October 1.

Response to Question #1.

_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 442 of 609 LNG Investigation ‘FSRU LNG Project’, in 2009 November.

The LNG Technical Advisors By way of an email, which was dated 2009 September 16, and which was entitled “LNG Technical Advisors”, Mr. Stephen Wedderburn informed the Hon.
James Robertson, Mrs. Hillary Alexander, Dr. Ruth Potopsingh, Dr. Carlton Davis, Dr. Wesley Hughes, Mr.

Oral Rainford, Ms. Kathryn Phipps, amongst others, of the following: “With the announcement that the issuance of an [sic] RFP for implementation of the Jamaican LNG Project is imminent, the appointment of a technical advisor becomes critical.

Ideally a technical advisor should be involved in the preparation of the RFP and be involved in the evaluation process once proposals are received.
If we seek to select a technical advisor through a formal tendering process, the exercise is likely to take at least 2 to 3 months meaning that either we delay the issuance of the major RFP or proceed with the major RFP without the important input of technical advisors.

I am recommending that we have to be strategic about the choice of technical advisor and seek special dispensation from the Prime Minister to appoint a technical advisor.
The suggestion was made at the last meeting that we need to be looking at the very large firms, but I disagree with this view.

Large firms excel at project implementation, but generally do not do so well in reviewing the work of others, which is what we need.

They are also notorious for moving slowly and of course are high-cost.
The other consideration is…large firms have virtually no experience in floating LNG regas systems, because up to very recently this has been a niche industry largely ignored by the established players… Some possible candidates that would be more suitable for the owners’ engineer role _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 443 of 609 LNG Investigation that we need would be Black & Veatch, Worley Parsons, CH-IV, Intec and Zeus.
Of these I beleive [sic] only Black & Veatch and Zeus will have any significant experience with floating LNG systems.

[N.B.

Black & Veatch is a large firm, but unlike those names previously they do not undertake construction].

As I have mentioned previously, Zeus in combination with Clean Skies have been knocking very vigorously on our door.

Please see attached presentations from Zeus/Clean Skies.

These presentations indicate that they understand our requirements extremely well.
I am aware that Zeus was one of the earliest engineering firms to embrace floating LNG, publishing a major industry study on floating LNG in 2007.

It is not often that you find engineers with good commercial sense, but this is very evident in Zeus/Clean Skies.
I continue to recommend that we meet with Zeus/Clean Skies…I believe that they could very well be a candidate to consider for sole source appointment.”228 (OCG’s Emphasis) The OCG further identified an email which was sent from Mr. Authur Ransome, Vice President and General Manager, CH-IV International to a Mr. Ernie Megginson which was entitled, “Re: Discussion Today”, dated 2011 January 17.
(It is instructive to note, that Mr. Megginson was contracted by the Office of the Prime Minister in the capacity of a Project Manager for the ‘FSRU LNG Project’).

The referenced email stated, inter alia, the following: “Jeff Beale, President CH-IV International and I were both involved in discussions with Stephen and Joe/Pat in November, 2009.

It was clear from those discussions that Clean Skies LLC (Joe/Pat) had already been discussing the FSRU project with PCJ (Stephen).
However, I do not know exactly what involvement Pat and Joe had with the project up until that point.

PCJ mentioned to us that although it wanted to use the 228 Email from Mr. Stephen Wedderburn which was dated 2009 September 16 and which was copied to Dr. Ruth Potopsingh, Dr. Carlton Davis, etc.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 444 of 609 LNG Investigation services of Clean Skies to provide commercial services its procurement guidelines prevented it from directly hiring them.
However, since CH-IV had an existing contract with PCJ to provide Technical Advisory Services (related to the earlier, 2005 LNG project) and since it was expected that the new services would require non-core CH-IV services including LNG supply negotiation, offtaker discussions and establishment of a regulatory framework it was suggested that we consider hiring Clean Skies on a subcontract basis thereby allowing CH-IV to become involved once again in this new venture.
The earliest email that we can find is dated November 15, 2009 from Stephen Wedderburn in which he informed us that he was formally back at PCJ and asked us to contact him to discuss the possibilities for CH-IV becoming involved in the Jamaican project again.

That and a subsequent discussion took place on November 16 and 17 and it was during those discussions that Stephen suggested we talk to Clean Skies.
Due to other commitments it wasn’t until November 24 that we got to talk with Joe Fossella and we sent an email to Stephen Wedderburn later that same day updating him on the conversation and also notifying Stephen that CH-IV would place Clean Skies under subcontract to provide various commercial services.

We formally placed Clean Skies under contract on December 2, 2009.

CH-IV was formally placed under contract by PCJ on April 8, 2010.
Although clearly the suggestion from discussions that we had with Stephen on November 16 / 17 neither Jeff nor I can find an email from PCJ in which it is clearly suggested or stated that we hire Clean Skies.” (OCG’s Emphasis) The OCG found that based upon the assertion of Mr. Authur Ransome, Vice President and General Manager, CH-IV International, the PCJ wanted to use Clean Skies LLC to provide commercial services for the LNG Project.
However, due to poor planning on the part of the PCJ, there was limited time to allow for the proper use of the procurement guidelines in the contracting of Clean Skies LLC and, as such, the OCG has found that it was asserted that Mr. Stephen Wedderburn recommended that Clean Skies LLC, which is owned by Mr. Joseph _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 445 of 609 LNG Investigation Fossella, enter into a sub-contract with CH-IV International, given that there was a pre-existing contract between CH-IV International and the PCJ from 2005.
The OCG found that Clean Skies LLC was actually sub-contracted by CH-IV International.

By way of an email, which was dated 2009 November 24, Mr. Jeff Beale, President, CH-IV International, informed Mr. Stephen Wedderburn, LNG Project Coordinator, PCJ, of, inter alia, the following: “Arthur Ransome and I just completed a long and productive discussion with Joe Fossella.

One action arising from the discussion is to proactively place Joe’s company under subcontract to CH-IV.
We look forward to discussing further how CH-IV may now support Jamaica’s LNG efforts.” The OCG also found that Mr. Stephen Wedderburn, responded to the foregoing email on 2009 November 24, in which he stated, inter alia, the following: “I believe the Evaluation Team for the RFP responses…will meet next week…It would be useful if you could provide by then any initial thoughts on how you would be able to help out with that process.” (OCG’s Emphasis) The OCG found that there were several other email correspondence between Mr. Stephen Wedderburn and CH-IV International, in regard to the re-engagement of that company.
These are as follows: _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 446 of 609 LNG Investigation Date Sender/Receiver of Subject of Information Disclosed Correspondence Correspondence 2009 November Email from Mr. Stephen Jamaica FSRU “Thanks.
While the proposal review is 30 Wedderburn to Mr. Project: CHIV certainly most [sic] urgent task at the Arthur Ransome Proposal for moment and the easiest one to specify, I Evaluation Support think it is important not to omit the other components that we will want CH-IV to work on: • Technical and Commercial Support in negotiation of contractual arrangements with the selected bidder • Technical and Commercial Support in the negotiation of an LNG Supply Agreement • Technical and Commercial Support in the negotiation of gas offtake arrangements with the gas users • Technical and Commercial Support in the development of a gas regulatory framework • Monitoring of Project Implementation/Construction” 2009 December 4 Email from Mr. Stephen Jamaica FSRU “…In the meantime, please remember that Wedderburn to Mr. Project: CHIV I also need updated info on capability and Arthur Ransome Proposal for credentials.
The question has been raised Evaluation Support as to Ch-IV’s ability to deal with floating as opposed to onshore LNG regas and I want to put those questions to rest.
It would be extremely helpful if I could get this information by Monday.” _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 447 of 609 LNG Investigation Date Sender/Receiver of Subject of Information Disclosed Correspondence Correspondence 2009 December 7 Email from Mr. Arthur - “Please find attached a copy of CH-IV Ransome to Mr. Stephen International’s Corporate Profile Wedderburn document, which provides details of specific offshore and floating technology projects including liquefaction and regasification.
CH-IV’s experience is technically focused and its clients include leaders in the FSRU sector of the LNG industry…” 2009 December 7 Email from Mr. Stephen Jamaica FSRU “I have not got any comments back on the Wedderburn to Mr. Project: CHIV scope of work, and I would suggest that Arthur Ransome and Proposal for you go ahead and finalize a proposal copied to Joseph Evaluation Support based on that scope of work.” Fossella, et al.
2009 December Email from Mr. Stephen - “I just wanted to let you know that things 20 Wedderburn to Mr. Arthur Ransome.

are progressing in terms of moving to finalize the re-engagement of CH-IV.

PCJ Board Director Angus Gordon has been mandated to negotiate with you with a view to finalizing an arrangement [sic] by Christmas.

There is some concern that some elements of your quotation are too high and the main issue now is to establish that your quotation represents value for money.
There is also some concern in the PCJ Board to relate the current quotation back to the quotations you made in 2005 to ensure that the current quotations are reasonable…” _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 448 of 609 LNG Investigation Date Sender/Receiver of Subject of Information Disclosed Correspondence Correspondence 2009 December Email fromMr.

Arthur Jamaica FSRU “Thanks for email Stephen.


Since tour [sic] 20 Ransome to Mr. Stephen Project: CHIV last email, Joe and I have started to look Wedderburn and copied Proposal for closer at our proposal for the bid to Joseph Fossella, et al.

Evaluation Support review...” 2009 December Email from Mr. Joseph Jamaica FSRU “Arthur, with the latest email from 20 Fossella to Mr. Arthur Project: CHIV Stephen, we are reviewing all the man Ransome, Mr. Stephen Proposal for hours and costs we provided.
We will have Wedderburn and copied Evaluation Support a revised proposal to you in the morning.

I to Mr. Jeff Beale, et al.

think they are looking for an all around reduction.

Since the bulk of the hours are with CS, we will be revising our hours…” Based upon the foregoing, the OCG found that Mr. Stephen Wedderburn, LNG Project Coordinator, PCJ, was in contact with representatives of CH-IV International and Clean Skies LLC.
It is instructive to note that the emails suggest that Mr. Stephen Wedderburn passed on information, which was discussed by the PCJ Board of Directors, with respect to CH-IV International’s proposal to provide Technical Advisor services for the ‘FSRU LNG Project’.

Of note, is that several of the emails occurred subsequent to the issuance of the RFP and prior to the signing of a contract with CH-IV International in 2010 April.
It is also instructive to note that the PCJ Board of Directors held discussions with respect to the re-engagement of CH-IV on 2009 December 22 and the foregoing emails from Mr. Stephen Wedderburn, preceded that date.
In this regard, the Minutes of the Meeting of the PCJ Board of Directors, which was held on 2009 December 22, stated, inter alia, the following concerns: “Director Gordon queried whether PCJ was using the existing Contract as the vehicle to start back with CH-IV suggested that was not [sic] way to proceed in his opinion.

He also said that even if the existing Contract is used, the scope will be different.
Director Watson explained that the present Contract is the only one with CH-IV and that it was _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 449 of 609 LNG Investigation acted on until 2008 and was now a dormant Contract… …Director Watson stated that to the extent that some of what the TA would have to do i.e.
based on the scope of work, to the extent that another party could be used to do anything under that scope, the TA could say that PCJ is in breach unless the Contract was terminated.

He stated that the TA would have to present a revision of the scope of work in keeping with the new direction and that is not a difficulty because the Contract allows for amendment but NCC is more concerned with the contracting process and the price.
PCJ is at liberty under any Contract to amend any provision and to revise the scope and that is not the NCC’s jurisdiction…Director Watson stated that he did not see a closing period in the Contract… The Corporate Secretary stated that in relation to the engagement of CH-IV, in any event there has to be an amendment of the Contract in terms of the pricing for the work to be undertaken, the scope and the deliverables which is in effect a variation of the Contract terms.
In response to Director Gordon’s question if another Contract could be entered into with another party, he was advised that NCC’s approval would then be required and also retendering and that process could not be completed before the 5th January, 2010 the date for submission of bids.
It was also pointed out, that this is a subsisting Contract which NCC approved… Mr. Wedderburn pointed out in that when the Contract was originally executed it was expected that phase II would have continued immediately after what was called Phase I and a lot of the analysis and data to support Phase II would have come from Phase I work which was the feed study.
He stated that they do not have that equivalent for the FSRU because no feed study was done for the FSRU so there is no equivalent data to feed into the current work… Director Watson stated that he does not believe that the discussion contemplates a _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 450 of 609 LNG Investigation second bid but rather clarification so permission from the NCC is not an issue…” (OCG’s Emphasis) It is instructive to note that the contract between the PCJ and CH-IV International, which was dated 2010 April 8, included an Appendix B that provided a list of the key personnel and sub- advisors for undertaking the Technical Advisor Services.
These are as follows: Name Company Key Responsibilities Authur Ransome David Almandoz Joseph Fossella CH-IV International CH-IV International Clean Skies LLC Patrick LaStrapes Clean Skies LLC Project Manager Project Engineer Project development, tender process and commercial strategy advisory services and nrgotiating [sic] support The OCG conducted an internet search for Clean Skies LLC on 2011 January 25, and found that Mr. Joseph Fossella is the President of the said company.
The website provided a summary of ‘Joseph Fossella’s Experience’ which stated, inter alia, the following: “Captain Exmar Shipmanagement NV (Oil & Energy industry) 2006-2010 (4 years)”229 It is instructive to note, that the OCG conducted a second search of the referenced website on 2011 February 3, and found that the foregoing information was removed from the referenced ‘Joseph Fossella’s Experience’.
229 Website - http://www.linkedin.com/in/rover63 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 451 of 609 LNG Investigation By way of a publication, which was dated 2008 November 5, and which was entitled “EXMAR forms Alliance to Create Floating Liquefaction, Storage and Offloading Solution” Exmar Marine NV indicated, inter alia, that “EXMAR has specifically formalised a relationship with its long- time LNG partner, Excelerate, and with Black & Veatch, a proven provider of natural gas processing and liquefaction technology…This partnership forms a solid basis for the successful development of the first floating liquefaction, storage and offloading solution in the world…” The OCG also found, by way of the referenced information on the internet, that Mr. Joseph Fossella was the then Vice President, Business Development, at Black & Veatch, from January 2002 to November 2008.
The OCG in an effort to clarify the information which was identified on the referenced website, sent a Follow-Up Letter of Invitation (LOI) to Exmar Marine NV, which was dated 2011 February 11, and posed the following questions: “Please indicate whether you are aware of a Mr. Joseph Fossella.

If yes, please indicate the circumstances under which you met Mr. Joseph Fossella and the nature of the Exmar Marine NV’s association and/or affiliation with Mr. Joseph Fossella.
Please indicate whether Mr. Joseph Fossella is/was: (a) employed to, (b) consulted by and/or (c) a business partner with, the Exmar Marine NV and/or the Exmar Shipmanagement NV.

If yes, please provide responses to the following: i. ii.

iii.
iii.

A list of all the positions which are/were held by Mr. Joseph Fossella and an Executive Summary detailing the job description of each post identified by you; The date(s) on which such positions were held by Mr. Joseph Fossella; and A list of the projects Mr. Joseph Fossella was consulted on and/or partnered with Exmar Marine NV.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 452 of 609 LNG Investigation If your answer to Question No.

2 is ‘No’, please state whether Mr. Joseph Fossella has acted on behalf of and/or represented Exmar Marine NV and/or Exmar Shipmanagement NV.

If yes, please provide full particulars of: (a) the capacity in which he acted; (b) the date(s) of same; and (c) the circumstances relating to same.
Please provide an Executive Summary detailing the business relationship, if any, between the Exmar Marine NV and the company Black & Veatch and/or Clean Skies LLC.
Please indicate whether you were aware that Mr. Joseph Fossella was a representative of the Technical Consultant, CH-IV International, which has been contracted by the PCJ in Jamaica to provide services for the referenced project to which your company, Exmar Marine NV has submitted a bid.”230 Exmar Marine NV, in its response to the OCG’s LOI, which was dated 2011 February 28, stated, inter alia, the following: “Yes we are aware of a Mr. Joseph (Joe) Fossella.
Some members of our staff met with Mr. Joseph Fossella prior to November 2008 when discussing the terms of the alliance involving Black & Veatch, Excelerate Energy and our company as referred to in the press release attached to your letter… Mr. Joseph (Joe) Fossella was just one member among others of the Black & Veatch negotiation team.

He announced his retirement from Black & Veatch in October 2008, i.e.

prior to conclusion of the negotiations.


The person in charge of this file for Black & Veatch was Kerry Errington, Senior Vice President…not Mr. Joseph Fossella who was Vice President Business Development for Black & Veatch.

Some members of our staff met again with Mr. Joseph Fossella in 2010 in Kingston, Jamaica, on the occasion of the presentation of our bid in February, the confirmation 230 OCG’s Follow-Up LOI to Exmar Marine NV, which was dated 2011 February 11.
Questions 1-5 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 453 of 609 LNG Investigation of our selection as preferred bidder in June and the negotiation of the terms of Implementation Agreement between the Government of Jamaica and the Exmar Consortium members from September through December.
Mr. Joseph Fossella was a member of the CH-IV technical advisers to the Petroleum Company of Jamaica acting as agent for the Government of Jamaica.

Other than the foregoing contacts there is no association or affiliation between Mr. Joseph Fossella and our company.

No, Mr. Joseph Fossella is not, nor was, employed or consulted by or a business partner with Exmar Marine NV or Exmar Shipmanagement NV.
No, Mr. Joseph Fossella has not acted on behalf of and/or represented Exmar Marine NV or Exmar Shipmanagement NV.

The press release attached to your letter…contains a good summary of the business relationship between Exmar Marine NV and Black & Veatch.

Exmar Marine NV has no business relationship with Clean Skies LLC.
We were not aware that Mr. Joseph Fossella was a representative of the technical consultant CH-IV International until the date of presentation of our bid for the captioned project in February 2010.”231 Based upon the foregoing, the OCG found that Mr. Joseph Fossella was not employed to the Exmar Marine NV and/or Exmar Shipmanagement NV.
However, the information confirmed that Mr. Joseph Fossella was a representative of Black & Veatch and was involved in the negotiation between Exmar Marine NV and the referenced company, to which there is an alliance between both companies.

231 Response from Karel Stes, Company Secretary, Chief Legal Officer, Exmar Marine NV, to the OCG’s LOI, which was dated 2011 February 28.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 454 of 609 LNG Investigation Of note, is that Black & Veatch was a company which was identified by Mr. Stephen Wedderburn on 2009 September 16, as a possible candidate with respect to the LNG project.
It is instructive to recall that by way of an email, which was dated 2008 November 5, Mr. Stephen Wedderburn informed Mr. Ian Moore of the following: “For information please see press release from Exmar indicating that they are pursuing a floating liquefaction deal in partnership with Excelerate and Black & Veatch.

As you know Exmar is a company that does not let the grass grow under their feet, so having made this announcement you can be sure that the unit is just a couple years away.
The idea of…getting direct access to a small gas field in either Colombia or Trinidad would still be of great value for Jamaica and if you are able to follow up any leads from your end it would be very useful.

I am pleased to have played a role in introducing Exmar and Black & Veatch to each other.” (OCG’s Emphasis) The OCG found that the current LNG Steering Committee is also aware of the possible irregularity and impropriety in the LNG project, between Mr. Stephen Wedderburn and Mr. Joseph Fossella.
By way of Minutes of the Meeting of the LNG Steering Committee which was held on 2011 February 9, the following, inter alia, was indicated: “The Chairman updated members on recent developments in the matter.

Members of the current LNG Team were being accused of hacking into Joseph Fossella’s LinkedIn profile by Stephen Wedderburn, Project Coordinator-LNG at PCJ.

Mr Fossella was the primary consultant working with CH-IV during the bid evaluations in 2010.
He is also a partner in Clean Skies LLC and his company was contracted by CH-IV to work on the previous LNG project.

Mr Megginson informed members that in his discussions with CH-IV he asked them about the company’s relationship with Fossella.
He was advised _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 455 of 609 LNG Investigation that there was a previous relationship between Wedderburn and Fossella prior to the RFP for the FSRU and gas pipeline.

It was Wedderburn who had recommended to CH-IV in November 2009 that they grant Clean Skies a sub-contract in relation to the previous LNG project.
Mr Logan added that he had discussions with CH-IV and they confirmed that Wedderburn and Clean Skies were contracted at the request of PCJ.

It was also pointed out that Mr. Fossella’s previous employers, Black & Veatch, had an alliance with Exmar which started in 2008… The Chairman asked about the impact of the FSRU going back to tender.

Mr Megginson advised that the result would likely be a six (6) month delay...” Based upon the foregoing, the OCG has found the following: i.
That Mr. Stephen Wedderburn had discussions with both Mr. Joseph Fossella and Mr. Patrick LaStrapes of Clean Skies LLC in 2009 November, around the time of the commencement of the tender period for the ‘FSRU LNG Project’, to provide commercial services on the said project.

ii.

Mr. Joseph Fossella was a part of the LNG Technical Evaluation Team which had the core responsibility to assist with the Evaluation of the Bids.

iii.
iii.

Mr. Stephen Wedderburn explicitly stated that he played a role in introducing Exmar Marine NV and Black & Veatch to each other.

iv.

Mr. Stephen Wedderburn recommended that CH-IV International sub-contract Mr. Joseph Fossella’s company, Clean Skies LLC, to work on the ‘FSRU LNG Project’.
It is instructive to note that Sub-Section S-1040 of the Revised GOJ Public Sector Procurement Procedures (2008 November), provided, inter alia, the following: _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 456 of 609 LNG Investigation “CONFLICT OF INTEREST All personnel involved in handling a procurement process are expected to observe the GOJ Code of Conduct for Civil Servants outlined in the Staff Orders and to be free of interests or relationships that are actually or potentially detrimental to the best interests of GOJ and shall not engage or participate in any transaction involving a company, its affiliates, divisions or subsidiaries in which they have even minor interests.
Any GOJ personnel involved in a procurement process that has assumed, or is about to assume, a financial or other outside business relationship that might involve a conflict of interest, must immediately inform their supervisors in writing of the circumstances involved.

This information is to be reviewed at an appropriate level for a decision whether a conflict of interest is present, and if so, what course of action will be taken.
A conflict of interest exists when a GOJ personnel involved in a procurement process: 1.

Has an outside interest that materially encroaches on time or attention that should be devoted to the affairs of GOJ; 2.
Has a direct or indirect interest in or relationship with an outsider that is inherently unethical or that might be implied or construed to be, or make possible personal gain due to the personnel’s ability to influence dealings, render the personnel partial toward the outsider for personal reasons or otherwise inhibit the impartiality of the personnel’s judgment; 3.
It is the duty of all staff and any other public employee directly or indirectly involved with the procurement process, especially in the _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 457 of 609 LNG Investigation preparation of bidding documents, evaluation, contract negotiations, contract management and payments to declare any potential conflicts of interest.
A conflict of interest will arise when the individual has a direct or indirect relationship with a bidder, consultant, contractor or supplier; 4.

Takes personal advantage of an opportunity that properly belongs to GOJ; 5.

Uses GOJ property without approval; 6.

Discloses GOJ trade secrets or any other proprietary information to unauthorized persons.
All personnel involved in GOJ procurement process, found to be in violation of this policy will be subject to sanctions in accordance with the Laws of Jamaica.

Furthermore, bidders and consultants with potential conflicts of interest will also be considered ineligible to bid or submit a proposal.

A conflict of interest will exist when a firm has been previously hired to provide services for the project design, preparation and implementation.
This firm and all of its affiliates will not be eligible to provide goods, works or services for any contract that relate in whole or in part to earlier services provided by it.

IV.

UNETHICAL CONDUCT All involved in GOJ procurement process must comply with the GOJ Code of Conduct for Civil Servants outlined in the Staff Orders.

No individual shall use his authority or office for personal gain.
Personal gain includes accepting or requesting anything of material value from bidders, prospective bidders or suppliers for the individual, his or her spouse, parents, _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 458 of 609 LNG Investigation children or other close relatives, or for other persons from whom the individual might gain direct or indirect benefit of the gift.
An individual shall seek to maintain and enhance the reputation of the GOJ by: • Maintaining the highest standards of honesty and integrity in all relationships both inside and outside the Procuring Entity in which he works… • Conflict of interest - An individual shall declare any personal interest that may affect or might reasonably be deemed by others to affect impartiality in any matter relevant to their duties; • Disclosure of personal relationships – an individual shall declare any relationship with a bidder, supplier, contractor or consultant and shall take no part in either the decision making process or the implementation of any contract where such a relationship exists.
A personal relationship is defined as consanguinity or affinity.

Disclosure may be made in writing or, in the context of a meeting, verbally.

However, having made the disclosure the individual shall not sit in the meeting while deliberations on the subject matter are being conducted.
• Confidentiality and accuracy of information - An individual shall respect the confidentiality of information gained in the course of duty and shall not use such information for personal gain or for the unfair benefit of any bidder, supplier, contractor or consultant; • Information given by an individual in the course of their duty shall be true, fair and not designed to mislead; • Competition - All bidders, suppliers, contractors and consultants shall be treated with fairness and impartiality, and avoid any business arrangement that might prevent the effective operation of fair competition… • Hospitality - An individual shall avoid any business hospitality that would be viewed by others as having an influence in making a government business decision as a result of accepting that hospitality; • Reporting - All individuals have a moral and ethical responsibility to report _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 459 of 609 LNG Investigation any unethical conduct by a colleague, a bidder or a supplier to their superiors, oversight agencies, CG or to the auditors.
• Examples of Unethical Conduct - The following are examples of the type of conduct prohibited by this Code of Ethics: - Revealing confidential or “inside information” either directly or indirectly to any bidder or prospective bidder; - Discussing a procurement with any bidder or prospective bidder outside the official rules and procedures for conducting procurements; - Favouring or discriminating against any bidder, prospective bidder or consultant in the preparing of technical specifications, terms of reference or standards or the evaluation of bids and proposals; - Destroying, damaging, hiding, removing, or improperly changing any formal procurement document; - Accepting or requesting money, travel, meals, entertainment, gifts, favours, discounts or anything of material value from bidders or prospective bidders, suppliers, contractors or consultants; - Discussing or accepting future employment with a bidder or prospective bidder, suppliers, contractors or consultants; - Requesting any other person to violate the public procurement rules or procedures; - - Ignoring evidence that the Code of Ethics has been violated; Ignoring illegal or unethical activity by bidders or prospective bidders, suppliers,contractors or consultants including any offer of personal inducements or rewards.” Having regard to the foregoing, it is instructive to note that Mr. Stephen Wedderburn disclosed his interest in a project to which Exmar Marine NV was a party.
However, the OCG has found no evidence to suggest that Mr. Wedderburn disclosed his relationship with Mr. Joseph Fossella, a sub-contractor of CH-IV International, who was actively involved in the Evaluation of the Bids for the ‘FSRU LNG Project’.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 460 of 609 LNG Investigation It must be noted that Mr. Joseph Fossella is also the former employee of Black & Veatch, a company with which Exmar Marine NV has an alliance and who was a member of the ‘negotiation team’ for Black & Veatch, prior to his retirement in 2008.
Of note, is the fact that Mr. Stephen Wedderburn asserted that he was responsible for the introduction of Exmar Marine NV, the current ‘preferred bidder’, to Black & Veatch.
Further, the OCG found that Mr. Stephen Wedderburn participated in the meeting of the PCJ Board of Directors, which was held on 2009 December 22, in which he spoke to the particulars of the contract with CH-IV International, at the time when the PCJ Board of Directors was deliberating on the re-engagement of the Technical Consultant, CH-IV International.
However, it is instructive to note that a review of the referenced meeting did not indicate that Mr. Wedderburn disclosed to the then PCJ Board of Directors his prior communications with CH-IV International and Clean Skies LLC with respect to the services which were required of the Technical Consultant.
In addition, the OCG found that Mr. Stephen Wedderburn recommended and guided the Technical Consultants, CH-IV International and Clean Skies LLC, with regard to the pricing of their quotation whilst informing the Consultants of the deliberations of the PCJ Board of Directors.
As such, Mr. Wedderburn, by way of an email, which was dated 2009 December 20, advised Mr. Arthur Ransome, inter alia, as follows: “I just wanted to let you know that things are progressing in terms of moving to finalize the re- engagement of CH-IV… …There is some concern that some elements of your quotation are too high and the main issue now is to establish that your quotation represents value for money.
There is also some concern in the PCJ Board to relate the current quotation back to the quotations you made in 2005 to ensure that the current quotations are reasonable…” It is instructive to note that the sub-contracting of Clean Skies LLC was done pursuant to a _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 461 of 609 LNG Investigation recommendation which was made by Mr. Stephen Wedderburn.
The referenced recommendation was made with the intention to circumvent the procurement procedures.

In this regard, Mr. Arthur Ransome, CH-IV International, in an email which was dated 2011 January 17, indicated, inter alia, that “PCJ mentioned to us that although it wanted to use the services of Clean Skies to provide commercial services its procurement guidelines prevented it from directly hiring them.
However, since CH-IV had an existing contract with PCJ…it was suggested that we consider hiring Clean Skies on a subcontract basis.” _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 462 of 609 LNG Investigation Evidence of Impropriety and Irregularity Questions of impropriety and irregularity arose with respect to certain activities which were undertaken by certain key persons with regard to the ‘FSRU LNG Project’.
Based upon the information which has been provided to the OCG, the OCG found that there were significant collaborative efforts between Mr. Stephen Wedderburn and Mr. Ian Moore during his tenure as Chairman of the PCJ Board of Directors.

In this regard, the OCG found several pieces of correspondence from which it can be inferred that both Mr. Wedderburn and Mr. Ian Moore were actively pursuing LNG as an energy option and, in so doing, attempted to divert from the GOJ policy agenda of the then Minister.
Further, the OCG found that prior to the bidding process in 2009 November, Mr. Stephen Wedderburn and Mr. Ian Moore, in their attempts to divert from the policy agenda towards LNG shared more information with Exmar Marine NV, than any of the other nine (9) potential bidders.

In point of fact, in one correspondence the OCG found that Exmar Marine NV was identified by Mr. Stephen Wedderburn as his first choice based upon his assessment prior to the commencement of the tender process in 2009 November.
In an email which was dated 2008 January 23, Mr. Stephen Wedderburn informed Mr. Stephen Hanan, Mr. Conrad Kerr and Mr. Ian Moore, inter alia, as follows: “…To clarify the role of Exmar, PCJ wants the Exmar proposal to be treated as the base case for the implementation of the LNG Project in Jamaica and the proposal being developed for the Prime Minister should reflect this.
Therefore Exmar becomes more than just one of a number of alternatives, but their selection as infrastructure provider would still be subject to due diligence.
If the due diligence reveals that there are any fundamental flaws to the Exmar proposal or that it _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 463 of 609 LNG Investigation is not the most cost-effective proposal then we would be prepared to look at other alternatives.
We would want to have due diligence on Exmar’s proposal commencing immediately so that by the time we are prepared to sign definitive agreements, we would know whether we are sticking with Exmar or not…”232 (OCG’s Emphasis) In another email, which was dated 2008 February 1, Mr. Stephen Wedderburn informed Mr. Ian Moore, inter alia, as follows: “I copied you on a note I sent to Minister Broderick regarding the Norwegian contact he said he had…the company would not be a provider of LNG, but rather would be a competitor to Exmar to supply the floating regas facilities.
However, this raises a point I have wanted to discuss with you, which is how do we treat with the other companies who are interested in providing floating regas solutions?

I do believe that Exmar stands out by way of the significant development work it has done in coming up with customized solutions for Jamaica and by the initiatives it has undertaken to present a turnkey solution that takes into account all the infrastructure.
Exmar and the other Belgian companies also bring with them the support of their Government.

There are therefore solid reasons why Exmar is a clear frontrunner.

However, because other companies have expressed interest, if we make an announcement that we have selected Exmar there are likely to be complaints by these other companies that they were not given a fair chance to compete with Exmar on an equal footing… Please note that…PCJ had launched a pre-qualification process…Nine companies 232 Ibid.63.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 464 of 609 LNG Investigation indicated interest… Because of the uncertainties and dithering over the project I had not carried this pre- qualification process to completion.
However, it is safe to say that Exmar would have been ranked number one… It is clear that there are several well-qualified companies that are interested in providing the…FSRU facilities, but none has showed the level of interest that Exmar has in going the extra mile to help bring the Jamaican project to fruition.

Also only Exmar has shown any interest in going beyond the provision of the floating facilities to look at the entire project infrastructure.
You will see all these companies when you go to Bangkok and they will all be interested in hearing what is our position to go forward.
Should I invite these companies to put proposals forward with respect to their technical solution, cost and time of implementation within the next month, or should we just let sleeping dogs lie?”233 (OCG’s Emphasis) The OCG found that the Exmar Marine NV proposal was allegedly being requested by the PCJ to be used as a “…base case for the implementation of the LNG Project in Jamaica”234.
In this regard, by way of an email, which was dated 2008 January 23, Mr. Stephen Wedderburn provided the foregoing position to representatives of Merrill Lynch, in the persons of Mr. Stephen Hanan and Mr. Conrad Kerr, Mr. Ian Moore, amongst others.

It is also instructive to note that Exmar Marine NV worked behind the scenes developing their technical and commercial proposals prior to the RFP being issued in 2009 November.
The referenced email of 2008 February 1, further revealed that Mr. Stephen Wedderburn, had 233 Email from Mr. Stephen Wedderburn which was dated 2008 February 1, to Mr. Ian Moore.

234 Email dated 2008 January 23 from Mr. Stephen Wedderburn.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 465 of 609 LNG Investigation already identified Exmar Marine NV as the entity which would have been ranked number one had the 2007 pre-qualification exercise been completed.
Mr. Stephen Wedderburn, by way of an email to Mr. Bart Lavent, Director, Exmar Marine NV, which was dated 2008 February 20, and which was copied to Mr. Ian Moore, stated, inter alia, the following: “Bart, Good news.

Unfortunately in our Government setting, people are reluctant to take definitive decisions.

The PCJ Board did approve the selection of CO2 Consult, but with a condition.

The Board has asked that we explain the selection procedure to the Office of the Contractor General and get their OK.
Unfortunately this is a process with a significant risk of delay.

The concern of the Board is about how the four firms were identified.

I have explained to them that we needed to have a firm familiar with the Belgian carbon credit process and thus we relied on the judgment of Exmar.
It would be helpful if you could provide some additional information on the basis of the selection of these firms and it would be even better if you could provide some attestation to the capability of these firms from a Belgium Government source and to the need to act quickly, perhaps from someone like Amb.

Portocarero for example.” Based upon the foregoing the OCG found the following: 1.
The OCG found that the LNG project was officially inactive during Mr. Ian Moore’s tenure as Chairman of the PCJ Board of Director as the then Minister was pursing another agenda.

However, while the official policy agenda was coal, Mr. Stephen Wedderburn and Mr. Ian Moore were actively pursuing LNG opportunities behind the _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 466 of 609 LNG Investigation scenes.

2.
2.

Further, in several pieces of correspondence, the OCG has found where Mr. Stephen Wedderburn has explicitly provided his personal assessment of the LNG providers, and, in doing so, has consistently ranked Exmar Marine NV as his number one and preferred choice.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 467 of 609 LNG Investigation Alleged Associations between Minister James Robertson and Mr. Ian Moore The OCG received an anonymous allegation, by way of an email, which was dated 2010 December 11, which stated the following: “if you really want to find the link between moore and robertson, go back fifteen years and investigate a call bypass business – precision enterprises – that they were involved and check out an account held by moore at wachovia that is used for political funding.”235 Consequently, the OCG requisitioned both named parties, that is, Mr. Ian Moore, former Chairman of the PCJ Board of Directors, and the Hon.
James Robertson, Minister of Energy and Mining.

The OCG, by way of its Statutory Requisition, which was dated 2010 December 16, and which was addressed to the Hon.

James Robertson, Minister of Energy and Mining, posed the following questions: 1.

“Please indicate whether you are aware of the company, ‘Precision Enterprises’.

If yes, please provide responses to the following questions: a) Are/were you affiliated with the referenced company?
b) Full particulars of your involvement and/or affiliation, if any, with the referenced company; c) Full particulars of the role(s) and responsibility(ies), if any, which was/were held by you; 235 An anonymous allegation, which was received by way of an email, and which was dated 2010 December 11.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 468 of 609 LNG Investigation d) The date(s) on which you became involved in and/or affiliated with the referenced company; e) The name(s) and title(s) of the beneficial directors, beneficial owners, directors, shareholders and/or partners in the referenced company; f) The current status of your involvement and/or affiliation with the referenced company; and g) Please provide full particulars of your relationship, if any, with Mr. Ian Moore, regarding the referenced company.
Please provide documentary evidence, where possible, to support your response.

2.

Please indicate whether you are aware of Mr. Ian Moore contributing to and/or being used as a source of funding for any political campaigning and/or any form of political activity to the political party with which you are affiliated.
If yes, please provide responses to the following questions: a) The total monetary value, if any, which was contributed; b) The date(s) on which such monetary value was contributed; c) Details of the full particulars of the purpose and circumstances under which such a contribution was made; d) Please indicate whether you had made the approach to and/or engaged Mr. Ian Moore to provide funding.
If yes, please provide the date(s) on which such an approach and/engagement was made and the full particulars of the approach and/or engagement which was undertaken; _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 469 of 609 LNG Investigation e) Please indicate whether Mr. Ian Moore had approached you in regard to providing funding for any political campaigning and/or activity.
If yes, please provide the date(s) on which such an approach and/engagement was made and the full particulars of the approach; f) Were any agreements signed regarding the referenced contribution?

If yes, please provide documentary evidence to support your response; g) Has Mr. Ian Moore contributed funds directly to you for any form of political activity?
If yes, please provide full particulars of same; and h) Please indicate whether the funding of the respective political activity was used in any way as an incentive for the LNG Project to Jamaica.

If yes, please provide full particulars of the agreement, discussions and decisions which were taken and/or made as a result of same; 3.

Please indicate whether anyone assisted you and/or you had required any assistance in responding to this Requisition.
If yes, please provide the name(s) and title(s) of such person(s).

4.

Are you aware of any additional information which you believe could prove useful to this Investigation or is there any further statement in regard to the Investigation which you are desirous of placing on record?

If yes, please provide full particulars of same.”236 The Minister of Energy and Mining, in his response to the OCG’s Statutory Requisition, which was dated 2011 January 31, stated the following: 1.

(a) “Yes.
(a) “Yes.

I started the company with Mrs. Charlene Robertson.

236 OCG’s Statutory Requisition to the Hon.

James Robertson, Minister of Energy, which was dated 2010 December 16.

Questions #1-4 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 470 of 609 LNG Investigation (b) I was Managing Director until my appointment to the GOJ September 7, 2007, when I ceased being an officer of the company.
(c) As Managing Director, I was responsible for the day to day operation of the company.

(d) September 17, 1991.

(e) Charlene Robertson James Robertson.

As advised, I no longer hold any title or position in the company.

(f) Please note the response that I ceased being an officer in 2007 and currently has no formal involvement in the company currently.

(g) Mr. Ian Moore has no relationship with Precision Enterprises Limited.

I have no personal knowledge of this.

I have no personal knowledge of this.


I have no personal knowledge of this.

2.

(a) (b) (c) (d) No.

(e) No.

(f) No.

(g) I do not recall.

Several persons or entities would have contributed to fund raising and community activities and I have no records relating to fund raising efforts or events during the election period of 2001/2002 and 2006/2007.

(h) Absolutely not.

3.


My attorney Tom Tavares – Finson _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 471 of 609 LNG Investigation 4.
I was not involved in the bid evaluation or selection process relating to the Exmar Consortium being identified as the preferred bidder for the Floating Storage and Re- gasification Unit and Pipeline Infrastructure.”237 (OCG’s Emphasis) The OCG, by way of its Statutory Requisition, which was dated 2010 December 16, and which was addressed to Mr. Ian Moore, Director, CLNG, posed the following questions: 1.

Please indicate whether you are aware of the company, ‘Precision Enterprises’.
If yes, please provide responses to the following questions: a) Are/were you affiliated with the referenced company?

If yes, please provide responses to the following questions: i. ii.

iii.

iv.
v. Full particulars of your involvement and/or affiliation, if any, with the referenced company; Full particulars of the role(s) and responsibility(ies), if any, which were held by you; The date(s) on which you became involved in and/or affiliated with the referenced company; The name(s) and title(s) of the beneficial directors, beneficial owners, directors, shareholders and/or partners in the referenced company; The current status of your involvement and/or affiliation with the referenced company; 237 Response from the Hon.
James Robertson, Minister of Energy, which was dated 2011 January 31.

Responses # 1-4 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 472 of 609 LNG Investigation b) Are/were you aware of whether the Hon.

James Robertson has any interest in the referenced company?
If yes, please provide full particulars, inclusive of the date and circumstances by which you became aware of same; and c) Full particulars of your relationship, if any, with the Hon.

James Robertson, regarding the referenced company.

Please provide documentary evidence, where possible, to support your response.

2.

Please indicate whether you and/or any Entity with which you are affiliated has/have a ‘Wachovia Account’.
If yes, please provide responses to the following questions: a) Has the referenced account ever been used to fund political campaigning and/or used as a source of funds for any other form of political activity in Jamaica?
If yes, please provide full particulars of the political activity(ies) which the account was/were used to fund and the amount which was used to fund same; b) Please provide the date(s) on which the referenced account was used to fund the respective political activity; c) Please indicate whether the funding of the respective political activity(ies) was/were used in any way as an incentive for the LNG Project to Jamaica.
If yes, please provide full particulars of the agreement, discussions and decisions which were taken and/or made as a result of same; d) Please provide a copy of all Contract(s), Memorandum/Memoranda of Understanding and/or any other form of agreement in regard to the referenced matter; and e) Please provide the inflows and outflows from the referenced account from 2001 and/or the date of the opening of the account whichever is latest.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 473 of 609 LNG Investigation 3.

Please indicate whether you have had an official and/or personal relationship with the Hon.

James Robertson.
James Robertson.

If yes, please provide responses to the following questions: a) The date(s) on which such a relationship(s) was/were established; b) Detail the basis/bases upon which a such [sic] relationship(s) was/were established; c) The circumstances under which such a relationship(s) was/were established; d) The length of time of the relationship(s); and e) Full particulars of the reason(s) why such a relationship(s) was/were established.
Please provide documentary evidence, where possible, to support your response.

4.

Please provide an Executive Summary detailing the role(s) and responsibility(ies) of The [sic] Hon.
James Robertson, Minister of Energy and Mining, as known by you, in regard to the LNG Project and the components of same, and in particular, the proposed Financing, Development, Ownership and Operation of an FSRU LNG Re-gasification Terminal and Natural Gas Transmission System in Jamaica, during your capacity as Director of the Caribbean LNG (Jamaica) Limited.
The Executive Summary should, inter alia, include: a) A comprehensive list of all the discussion(s), negotiation(s), meeting(s), conference(s), seminar(s) and/or any other form of assembly, if any, held by the referenced Minister, in which you may have been in attendance, in regard to the referenced projects; b) Full particulars of the circumstances under which you have met with the Hon.
James Robertson, if any, in regard to the referenced projects; _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 474 of 609 LNG Investigation c) The date(s) on which you have met with the Hon.

James Robertson, in regard to the referenced projects; d) Full particulars of the discussions and/or decisions, if any, which had/have been made between yourself and the Hon.
James Robertson, in regard to the referenced projects; and e) A copy of any Contract(s), Memorandum/Memoranda of Understanding (MOU) and/or any other form of agreement(s), which have been signed between yourself, on behalf of CLNG and/or the Exmar Consortium, in regard to the referenced projects.

5.
Please provide a list of all the private companies, except CLNG, in which you have had and/or have a pecuniary interest and provide the following information for each: a) A copy of any Contract(s), Memorandum/Memoranda of Understanding (MOU) and/or any other form of agreement(s) between yourself and the listed company; b) The name(s) and title(s) of the person(s) with whom you have had some form of a business relationship, for each of the listed companies; c) The name(s) and title(s) of the beneficial directors, beneficial owners, directors, shareholders and/or partners for each of the listed companies; d) The date(s) on which you became involved and/or affiliated with the listed companies; and e) Full particulars of the role(s) and responsibility(ies) which were held by you in each of the listed companies.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 475 of 609 LNG Investigation 6.

Please indicate whether anyone assisted you in responding to the OCG’s Statutory Requisition of October 4, 2010 and/or this Requisition.

If yes, please provide the name(s) and title(s) of such person(s).

7.
7.

Are you aware of any additional information which you believe could prove useful to this Investigation or is there any further statement in regard to the Investigation which you are desirous of placing on record?

If yes, please provide full particulars of same.”238 Mr. Ian Moore, in his response to the OCG’s Statutory Requisition, which was dated 2011 January 10, stated the following: 1) “No 2) Yes a.

No b.
No b.

Not Applicable… c. Not Applicable… d. Not Applicable… e. Information will be provided under separate cover on or before February 28, 2011 3) I am acquainted with Minister James Robertson.

However I would categorize my knowing him neither as an Official relationship as none of us influences the decisions of the other, nor as a personal relationship since we do not generally socialize as friends.
4) I do not occupy an official position in government and am therefore uncertain of the exact roles and responsibilities of the Hon.

James Robertson.

I assume that the Honorable James Robertson holds/held responsibility for overall policy direction that broadly encompasses(ed) the LNG project.

238 OCG’s Statutory Requisition to Mr. Ian Moore, Director, CLNG, which was dated 2010 December 16.
Questions #1-7 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 476 of 609 LNG Investigation a.

(i) Discussions & Meetings.

There have been several meetings and discussions since 2009, both formal and informal.

It is impossible for me to recall every one.

Nevertheless I have noted below all that I am able to recall.

• June 2010 press conference to announce the preferred bidder.
I can also recall additional meetings as listed below.

Note that these meetings were not held by the referenced Minister and took place prior to the start of the referenced project in November 2009.

However, the referenced Minister was in attendance.

• June 2009 meeting to inform the ministry of the intent of EDC LNG to conduct the pre-feasibility study referred to at 13(a) in my response to your October 4, 2010 Requisition); (ii) Negotiations (none).

(iii) Conferences (none).

(iv) Seminars (none) b.


See response at 4a.

c. See response to 4a.

d. No decisions were made between me and the Honorable James Robertson in regard to the referenced project.

See responses at 4a for particulars of discussions.
e. In the context of Question 4, I have not signed on behalf of myself and/or CLNG and/or the Exmar Consortium any contract(s) memorandum of _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 477 of 609 LNG Investigation understanding and/or any other form of agreement with regard to the referenced project.

I do not hold signatory authority on behalf of the Exmar Consortium.
Further, I have not on behalf of CLNG, or any other firm, company, partnership or individual, signed any form of agreement with regard to the referenced project.

(OCG Emphasis) 5) Adjoined Business Solutions (ABSL), IREE Solar, JaJabber Ltd, NC River Farms and Gold’s Wrecker Service.

Liomoore Farms Ltd. Abuc Ltd, a.

Shareholder agreement for Adjoined Business Solutions… b.
It is impossible to state all the persons and entities that I have had some form of business with in my capacity as a representative of the listed companies.

However I can categorically state that I had not done business in any form with Minister James Robertson.
c. (i) Director/Shareholder listing Adjoined Business Solutions… (ii) Director/Shareholder listing IREE Solar… (iii) Director/Shareholder listing Jajabber Ltd… (iv) Director/Shareholder listing NC River Farms… (v) Director/Shareholder listing Golds Wrecker Service… (vi) Director/Shareholder listing Liomoore Farms Ltd… (vii) Director/Shareholder listing ABUC Ltd… d. My affiliation with the respective companies is noted below.
Adjoined Business Solutions (2008) Jajabber Ltd. (2003) (i) Gold’s Wrecker Service (1995) (ii) (iii) (iv) IREE Solar (2008) (v) NC River Farms (2008) (vi) (vii) Liomoore Farms Ltd 1990 ABUC Ltd. 1997 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 478 of 609 LNG Investigation e. My roles and responsibilities in the respective companies are noted below.
(i) Gold’s Wrecker Service (Shareholder/Director – no operational responsibilities) (ii) Caribbean Net Talk (Shareholder/Director – no operational responsibilities) Adjoined Business Solutions (Sales Director – responsible for sales) IREE Solar (Shareholder/Director – no operational responsibilities) (iii) (iv) (v) NC River Farms (Shareholder/Director – no operational responsibilities) (vi) (vii) Liomoore Farms Ltd. (shareholder – part time farmer) ABUC Ltd. (Shareholder/Director – no operational responsibilities) 6) No one assisted me in preparing the factual responses to your October 4th Requisition or to your Requisition of December 16th 2010 to which this Response is made.
However, legal counsel, Christopher Bovell Esq.

and David Wong Ken, Esq., reviewed the final Responses to both Requisitions prior to its submission to you.

7) …In regards to Precision Enterprises I repeat that I had no knowledge of that company until it was raised by your Requisition and I repeat again that I did not become acquainted with Minister Robertson until about 2006.

I am not a personal friend of Minister Robertson or of any politician on either side.
I am courteous and sociable to politicians on both sides, and if I have an idea I believe to be positive for the country, I do not hesitate to share it with them, or anyone else.

I have been made aware that numerous packages have been sent to the Gleaner as well as to the Observer that contain internal PCJ emails pieced together with instructions to the editors as to the questions that each publication should ask in an attempt to smear me.
Most recently, an anonymous fax was sent to the Observer with instructions to investigate my “life style”.

_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 479 of 609 LNG Investigation Everything that I have done in regard to the LNG project has been open and above board.
I declared to the MEM that private interest were going to embark on a feasibility study, openly declaring the intended approach to the PCJ and the OPM and reporting to the MEM on the results of the feasibility study.

You may have noticed the recent rise of the coal lobby through numerous articles in the Gleaner as well as the birth of the nuclear lobby.

All have expressed strong opposition to the LNG project.
I am left to wonder whether the opposing interests are against me personally or against LNG or simply proponents of coal…”239 (OCG’s Emphasis) Based upon the foregoing, the OCG found the following: i. ii.

That the Hon.

James Robertson was the Managing Director of the company, Precision Enterprises Limited, in which he was involved from 1991 September 17.

He further indicated that he ceased being involved with the company when he was appointed as Minister on 2007 September 7.

The Hon.
The Hon.

James Robertson also indicated that Mr. Ian Moore was not involved in the company Precision Enterprises Limited.

iii.

Mr. Ian Moore in his referenced response to the OCG’s Statutory Requisition of 2010 December 16, further indicated that he had no knowledge of the company, Precision Enterprises Limited.

The OCG has found no other documentary evidence to suggest otherwise.

iv.

The Hon.
iv.

The Hon.

James Robertson indicated that he was “…not involved in the bid evaluation or selection process relating to the Exmar Consortium being identified as the preferred bidder for the Floating Storage and Re-gasification 239 Response from Mr. Ian Moore, Director, CLNG, which was dated 2011 January 10.
Responses #1-7 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 480 of 609 LNG Investigation Unit and Pipeline Infrastructure” v. Mr. Ian Moore further noted that he had no discussions with the Hon.

James Robertson with respect to the LNG Project and, in particular, the ‘FSRU LNG Project’.
Mr. Moore, however, indicated in his sworn response to the OCG’s Statutory Requisition that, inter alia, “…There have been several meetings and discussions since 2009, both formal and informal…June 2010 press conference to announce the preferred bidder…Note that these meetings were not held by the referenced Minister and took place prior to the start of the referenced project in November 2009.
However the referenced Minister was in attendance.” He further indicated that he had a meeting with the Ministry to advise same of EDC LNG’s intent to conduct a pre-feasibility study for the ‘FSRU LNG Project’.

It is instructive to note that Mr. Ian Moore provided the OCG with the required Bank Statements under the cover of letters which were dated 2011 February 24 and 2011 April 27.

In the first instance, Mr. Moore provided Bank Statements for the period of 1999 November to 2003 December.
Subsequently, Mr. Moore provided the OCG with the remaining Bank Statements for the period of 2004 January to 2010 December.

The OCG conducted a review of the respective Bank Statements and did not find any evidence to substantiate the allegations which were made against Mr. Moore nor was there any suggestive evidence of transactions which were directed at political campaigning or business activities involving Minister James Robertson.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 481 of 609 LNG Investigation LNG Final Assessment Report by the Independent Consultants The OCG, was provided with a copy of a Draft LNG Assessment Report, which was dated 2010 November 3, on 2010 November 5, by way of a private meeting which was held between the Contractor General, Greg Christie, and the Hon.

Bruce Golding, Prime Minister of Jamaica.


The referenced meeting was initiated by the Prime Minister.

Subsequently, the Final LNG Assessment Report, which was also dated 2010 November 3, was submitted to the OCG by Ambassador Douglas Saunders, Cabinet Secretary, under the cover of a letter, which was dated 2010 December 7.

The referenced report was prepared by a Mr. Donald Hertzmark and a Mr. Haydn Furlonge.
The referenced report stated, inter alia, in its Executive Summary that “Two consultants were engaged to assist the Office of Cabinet in its assessments of the proposed Project, its technology, risks, timelines and financing…The Consultants were engaged by the Office of Cabinet at the beginning of October 2010 to review the progress on the proposed LNG regasification facility, the downstream pipeline and storage Projects and impacts of gas supply on the country’s electricity and industrial sectors.
The scope of work was given briefly as follows…: 1.

Assessment of the choices made so far regarding the key aspects of the Project… 2.

Assessment of Project economics, finance and of key issues related to security packages for financing; 3. Review of the consistencies and timelines regarding the other decisions and actions required…; 4.

FSRU facility… 5.

Assessment of the FSRU RFP; and 6.


Summary and prioritization of recommendations moving forward.”240 The following represent, inter alia, the summary of Findings and Recommendations of the referenced Report: 240 Independent LNG Assessment Final Report which was dated 2010 November 3.

_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 482 of 609 LNG Investigation Findings 1.
“…there is little technical risk in the FSRU approach to gas supply.

2.

…ultimately, the decision to go with the FSRU approach seems sound from both logistical and technical angles.

3.

…key uncertainties still plague the proposed FSRU Project.

They concern sizing, design and cost estimates and future growth in gas demand.

The Project cannot come to a financial closure without resolving these issues.
Resolution of these uncertainties would involve closing the data gaps withcompletion [sic] of improved studies of demand, sizing and location before proceeding to the EPC phase.

This is very likely to lead to Project delays and may increase or decrease total Project cost.

Keeping the current bidding process on track would imply a binding commitment to the current preferred bidder, with asubsequently [sic] higher degree of uncertainty on the Project deliverables and costs.

4.
4.

…other nations have navigated the regulatory requirements for FSRU-based gas imports successfully.

Jamaica will not need to develop its regulations for the gas industry or for the FSRU component de novo.

5.

…the consultants’ experiences with regulation-by-contract incline them to support a legal framework for gas use in Jamaica that removes most regulatory aspects from the contract and into the regulator.

6.
6.

…key elements of regulation of a gas industry at all stages – landing of the gas, construction, pipelines, tariffs, permits – are not yet in place and can delay construction and financing of the FSRU and pipeline system.

However, there exists the potential to adopt working regulatory approaches (and text) from other countries, including several in the Western Hemisphere.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 483 of 609 LNG Investigation 7.

…critical parts of the critical path are still undefined for the FSRU Project, and imperil timely completion of key Project agreements and financing.
Given that some elements of the design basis are not yet specified and that the regulatory framework need to be in place, it [sic] likely that Project start-up would be delayed and that deferring the current process until the key design, cost and regulatory elements are in place may have the same end time as making the necessary corrections on the current path.
Further, the likely date of completion of the power generation plants, the major gas customers, provides a time window to put critical pieces of the gas supply hard (FSRU, jetty, pipeline) and soft (regulation, finance) infrastructure into place with appropriate regulations governing cost allocation, access to the facilities and other agreements.

8.

…a signed Implementation Agreement with Exmar is an essential first step in moving the Project toward a kickoff of the key activities.
Financing for the Project will only be made available if there is a responsible party to take the financial liabilities for gas purchase and for the FSRU fees and costs.

The types of financing structures outlined above are commonly used on energy Projects and the FSRU sponsors and operators should be familiar with such conditions in the financing.

However, the strict conditions for gas supply and purchase will require regulatory oversight and this process must get under way soon.
In addition, the absence of any written intent to purchase gas from the SPV or to participate financially in same by Jamalco creates the potential for financial exposure for the Government of Jamaica, through PCJ.” Recommendations “The FSRU Project has many moving parts and requires significant coordination at all times.

The timeline is ambitious and can be upset easily with a few delays in approvals, design and financing.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 484 of 609 LNG Investigation 1.

At the present time there is no one entity that can oversee the entire process of proposals, design financing, construction, gas contracting, and regulation.
Correspondingly, the consultants recommend that the Government of Jamaica appoint advisors and managers for the Project reporting to the GoJ who will be tasked with overall Project coordination, including constructing and enforcing the Project timeline.

These advisors should be independent of existing advisory relationships.

2.

A second issue concerns the absence of regulation for the entire Project, but especially for construction and economic aspects.
The consultants recommend that the GoJ task its regulator with presenting a proposed framework to the Government by early-mid-2011… 3.

Uncertainty about final design parameters and gas demand prevent a detailed engineering design for the Project.

The consultants recommend that a focused economic and financial feasibility study be completed quickly leading to a final design specification for the FSRU and pipeline system.
• This study should ultimately lead to a more accurate cost estimate, which would feed into a more detailed and useful economic evaluation of the Project.

• Further, the consultants recommend that the technical advisors be tasked with a due diligence regarding the costs of comparable physical facilities as long as the construction and equipment supply bids are based on the current limited competition.

4.

There is considerable uncertainty regarding the prices at which LNG can be acquired.
This uncertainty influences the potential for investments downstream in energy…At the same time the kinds of commercial conditions underlying the facility’s gas purchase strategy are not known, nor is the risk to the country for failure in a gas acquisition strategy.
Purchase of LNG should be done by an experienced, qualified _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 485 of 609 LNG Investigation company, one that is independent of the SPV.

The consultants recommend that the Government require a gas acquisition strategy report from the presumptive gas importer… 5.
At present the Government of Jamaica, through PCJ, is in the process of acquiring some degree of financial responsibility for future gas purchases as the stand-in for the SPV in the Implementation Agreement (IA).

This situation has arisen on account of the lack of a letter of intent to purchase gas from Jamalco and the inability to obtain a purchase commitment on the power generation side until a winning bidder is selected.
The presence of the PCJ in the IA process is also the result of not having identified a gas supplier or even a procedure to choose a gas supplier.

The consultants recommend that the IA be deferred until there are signed letters of intent to purchase gas from both Jamalco and the winning bidder of the Power generation solicitation, as well as an outline of an approved regulatory framework.

The GoJ should not have any financial exposure through the IA process.

6.

Timing issues remain problematic.


The consultant believe that the Project is likely to encounter delays in its current form, due in large measure to the uncertainties created by the absence of a legal structure for the gas industry in Jamaica and by continuing uncertainties over participation by Jamalco…Consequently, there is less financial risk if the power plants are completed earlier than the gas plant than there is from the obverse.
Realistically, the new power plants are not likely to be ready to receive gas until at least mid-2014, more than 40 months from now.

This is sufficient time to remedy the defects in the current process noted in this report and the consultants recommend that this extra time be employed to effect the remedies suggested for the procurement, design and regulatory sides of the Project.

7.

Finally, the SPV remains something of a mystery in the overall Project setting.

Is it a cost centre?

A profit centre?


Who bears the consequences for bad sizing or operation decisions?

Is it an active market participant or simply a conduit or _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 486 of 609 LNG Investigation common carrier?

Who can join the club?

Does the SPV have the right to limit use of its facilities, and under what conditions and for how long?
The consultants recommend that a specific set of options, operating parameters and regulatory guidelines for the SPV be developed by mid-2011 capable of addressing each of these questions: • The evolution of the SPV and pipeline to some form of “reasonably” open access structure should be assured within its development framework, regardless of the initial conditions for its startup.

• The regulatory and financing aspects of the options must be specified in all cases.

8.
8.

The current active proposal for the SPV creates serious conflict-of-interest issues and could well retard the spread of gas use to other companies in the country and create negative perceptions of the degree of transparency surrounding this transaction.

At the same time the consultants believe that launching an entirely new round of bidding would create negative perceptions and delays that could potentially doom the Project.
Therefore, it will indeed be necessary to have the support of Jamalco and “Power Co” as launch customers.

However the current process with regard to the Implementation Agreement and establishment of the SPV is deeply flawed on grounds of transparency, risks to the GOJ, sizing, technical specifications and absence of an appropriate legal structure.
Correspondingly, the consultants recommend that the SPV be subject to the following specific remedies: • OUR should create regulations that become part of the setup parameters of the SPV… • The studies of demand, sizing, location, cost must be improved significantly between now and mid-2011 • The Implementation Agreement should be executed only when there is a letter of intent to purchase gas from one or both of the launch customers _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 487 of 609 LNG Investigation and a regulatory framework for the legal basis of the gas industry in Jamaica.
• The SPV sponsors must be willing to provide Letters of Intent to Purchase Gas that relieve the GOJ of its exposure to gas purchase contracts and to abide by the type of regulation contained in the OUR Framework (early mid-2011).

If this is not the case then the Consultants recommend that the current process be scrapped and that a new round of bidding be instituted with a separate owner-operator for the FSRU who will also undertake responsibility to purchase gas.
This company would operate as a regulated monopolist and would be subject to open access requirements, as would the companion, independently owned and operated pipeline company.”241 OCG’s Emphasis) By way of a letter, which was dated 2010 December 7, Ambassador Douglas Saunders provided the OCG with a copy of a document which was entitled “LNG Assessment Report: Assessment Report Comments”, which was prepared by CH-IV International for the Jamaica LNG Task Force.
Of note, the referenced report was not dated.

The referenced report stated, inter alia, the following: “The LNG Team has critically reviewed the DMP Report, and its recommendations and is of the opinion that the Report is not sufficiently informed nor captures the vast information developed by the LNG Team.
Should this have been possible, it would have facilitated a better understanding of the decision making process, of the rich history of studies and Front-End Engineering work done to date and the importance of adhering to the process and schedule currently underway… The Advisory team therefore recommends that the government of Jamaica proceed with the current strategy and plan to acquire a long term, competitive supply of LNG to reduce the excessively high energy costs of energy in Jamaica, provide fair and equitable 241 Independent LNG Assessment Final Report which was dated 2010 November 3.
A copy is appended.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 488 of 609 LNG Investigation costs of natural gas to the utilities and industrial users and enable the power generation sector of Jamaica to timely access a reliable source of clean burning natural gas to install highly efficient generation capacity that will significantly lower electricity costs… The Team…has developed a “Resolutions Action” Plan… Additionally, there are some key consequences [sic] DMP Report that must be considered carefully…”242 (OCG’s Emphasis) CH-IV International, in its referenced document also stated, inter alia, as follows: “REGULATION …the consultants recommend that the GOJ task its Regulator, the OUR, with presenting a proposed framework to the Government by early-to-mid 2011, before proceeding further with the project… Regasified LNG (i.e.
natural gas), as a commodity, however, should not be regulated, as the LNG will be priced (indexed) on the basis of a transparent North American benchmark.

• The Terminal Use Agreement (“TUA”) with the Exmar Consortium is being negotiated on behalf of the offtakers by the LNG Negotiating team charged with the responsibility of assuring that the public need is served and that the TUA is consistent with the best interests of Jamaica.

• The pipeline infrastructure will be fully under the purview of the OUR.
• Exmar and Promigas have identified the respective permits required for construction of the FSRU and the Pipeline and have provided a baseline schedule for the completion of the required tasks… While the development of a regulatory framework is clearly essential, we strongly 242 LNG Final Assessment Report Comments which were prepared by CH-IV International.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 489 of 609 LNG Investigation believe that such a framework and the implementation of final rules must be accomplished in parallel with the ongoing efforts to identify the offtakers, develop the commercial framework and, most importantly, land LNG.
• To our knowledge there is no statute requiring that a gas regulatory framework be fully promulgated prior to the development of the commercial structures to land LNG and repower industry, nor is there any statutory basis for prohibiting Jamaica from proceeding with the LNG project… Resolution: The LNG Team recommends that the GOJ develop, in parallel with the LNG initiative, a well-conceived, functional natural gas regulatory framework.
In the interim, the GOJ is guided by precedent where contracts stipulate the obligations and responsibilities of the parties that would, otherwise, be determined by regulation… GAS DEMAND: DMP highlight the issue of ambiguities/uncertainties around: • the demand for natural gas • location of the floating storage and regasification unit and • vaporization technology, sizing, design and cost estimates DMP indicated that these issues would prevent financial closure.
• These assumptions are not in keeping with the current plan.

The work done to date (perhaps subsequent to the brief assessment by DMP) on the IA has eliminated many of the ambiguities, and the Implementation Agreement (IA) is close to signature.

• The IA enables the Exmar Consortium to reserve the FSRU slot with submarket pricing and proceed with acquisition of the vessel.
PROJECT MANAGEMENT AND COORDINATION: DMP recommend that the …GOJ…appoint Project Advisors and Managers, independent _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 490 of 609 LNG Investigation of the existing Legal, Technical and Financial advisory relationships, and to coordinate the overall Project, and the construction and enforcement of project timelines.
…As FID approaches and the offtakers are identified, the management of the LNG side of the project will shift to the offtakers who will be: o the owners of the LNG and ultimately have the responsibility for execution… The OUR is already soliciting help in support of their efforts to evaluate the IPP bids… …GOJ will have no financial responsibility for gas purchases as a stand in for the SPV in the IA.

The committed bidders for the IPP have agreed to sign a TUA and a 20-year commitment to purchase LNG.
While there is optimism that Jamalco will participate in Phase 1, the threshold volume without Jamalco is sufficient to support the venture.

Resolution: Proceed with timely signing of the IA during the week of November 28 to enable Exmar to reserve the FSRU slot and proceed with the purchase of the vessel.

Working with the Attorney General’s Department, the OUR, CH-IV and Latham & Watkins, in parallel with the LNG initiative, develop a well-conceived, functional natural gas regulatory framework.
In the interim, contracts will stipulate the obligations and responsibilities of the parties that would, otherwise, be determined by regulations.

RELIABILITY OF TIMELINES FOR POWER PLANT READINESS: DMP is of the opinion that a realistic timeframe the new power plants to be ready to receive gas is mid-2014, more than 40 months from now.
In their view, this is sufficient time to remedy the defects in the current process noted in their report and recommend that this extra time be employed to effect the remedies suggested for the procurement, design and regulatory sides of the project.

• The LNG team and OUR have collaborated to synchronize the LNG and generation components of the combined undertakings.
At a recent Cabinet _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 491 of 609 LNG Investigation meeting, the OUR was advised that mid-2014 for the new generation was unacceptable.
• The LNG Team and OUR were directed to work together recognizing the goal of liberalizing the generation sector while, at the same time, compressing the timeline as much as reasonably possible… Resolution: The LNG team and the OUR must continue to work in concert to meet the established target commercial operation dates in 2013 and synchronize activities.
SPECIAL PURPOSE VEHICLE: • DMP recommend that a specific set of options, operating parameters and regulatory guidelines for the SPV be developed by mid-2011 capable of addressing each of these questions.

• The SPV is not an unusual modality in the overall project setting…The recommendation to clarify the SPV character is valid, and work will commence to answer the questions in the report… Resolution: Clarify the SPV charter guidelines.
• DMP regarded the current process with respect to the Implementation Agreement and establishment of the SPV as flawed on grounds of transparency, risks to the GOJ, sizing, technical specifications and absence of an appropriate legal structure.

Correspondingly, the consultants recommend that the SPV be subject to the following specific remedies.

• Transparency has been the cornerstone of the project to date.

The statement above again conveys misunderstandings of the SPV and the risks to GOJ.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 492 of 609 LNG Investigation • OUR should create regulations that become part of the setup parameters of the SPV; such regulations should cover cost, access, pricing, risk allocation and return on investment for the three main Project components – gas purchasing, the FSRU and the onshore gas pipeline; and the regulations need to completed in outline form by mid 2011 and in “black letter” (executable) form by late 2011.
Resolution: • The SPV is unregulated and not subject to the imposition of rules by the OUR; and • The SPV is unregulated and not subject to the rules that would be imposed by OUR.

• The studies of demand, sizing, location, cost must be improved significantly between now and mid-2011.

• A thorough understanding of demand, sizing, location and cost is well developed.
• The Implementation Agreement should be executed only when there is a letter of intent to purchase gas from one or both of the launch customers and a regulatory framework for the legal basis of the gas industry in Jamaica.

• The implication here is that the LOI is necessary to proceed with the FSRU.

Upon signing of the IA, Exmar is committed to making financial commitments to acquire the FSRU.
• The committed bidders for the IPP tender have agreed to sign the TUA and a 20 year commitment for the purchase of LNG.
• The SPV sponsors must be willing to provide Letters of Intent to Purchase Gas that relieves the GOJ of its exposure to gas purchase contracts and to abide by _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 493 of 609 LNG Investigation the type or regulation contained in the OUR Framework (early-mid 2011).
If not, the consultants recommend that the current process be scrapped and that a new round of bidding be instituted with a separate owner-operator for the FSRU who will also undertake responsibility to purchase gas.

This company would operate as a regulated monopoly and would be subject to open access requirements, as would the companion, independently-owned-and-operated pipeline company.

• This recommendation contradicts the Prime Minister’s stated objective of liberalizing the energy sector.
• Entrenching a “monopolist” would be a step back to the traditional regulatory compact… • To stop the process until a regulatory framework be established by OUR does not improve the project economics, schedule or benefits to Jamaica.

• The SPV will operate as a non-profit entity with no incentive to mark up the fuel costs.

The SPV’s primary purpose is to provide the nexus to secure a long term supply of LNG supply.

• The SPV is not intended to be a gas trading profit center.
The offtakers/sponsors will comprise the SPV and will place their balance sheets behind the SPV’s contractual commitments.
Resolution of this catch-all recommendation is key to advancing the project and maintaining the momentum gained to date…Working with the technical, financial and legal advisors, the project coordinator would not only coordinate achievement of milestones but would also assure at all times that project integrity is being maintained and that an effective, functional early warning regimen is in place.
PROJECT TIMELINES & IMPACT: To date, much has been accomplished, and a comprehensive project schedule has been developed: _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 494 of 609 LNG Investigation • Financing requirements are well understood, and a viable commercial structure has been developed… • The Exmar Consortium has proposed a 5% contingency, and has already spent sufficient time on the ground…and, based on its wealth of experience and its industry relations, is willing to take that risk…In short, the infrastructure effort is well underway with a proven design and a site that is agreed upon between all stakeholders… • Project delays arising from GOJ decision making have had an impact on the project schedule… • Aborting the current process and issuing a new infrastructure tender in 2011 would have disastrous consequences as far as the re-fueling of Jamaica is concerned… FEED STUDY: • Cost uncertainties might be somewhat mitigated with a FEED for both the FSRU, pipeline and generation facilities.
This option would likely cost some $5-$10 million, and tendering would delay the project by perhaps 18 months, with the risk of gas and infrastructure suppliers no longer interested in the Jamaican market.

• Opportunity costs to Jamaica would likely to be astronomical.
After 10 years of trying, the healthy skepticism of suppliers and other participants, the project is likely to collapse… • Actions are being taken to protect Jamaica through the contracts being put in place and the current activities underway that are aimed at establishing a functional regulatory framework… Currently, the LNG project is on a very fast timeline, with FID for the terminal scheduled for February or March 2011.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 495 of 609 LNG Investigation • The delay caused by opting for a new tender and restart will be very costly to the project, at best, and, in worse case, jeopardize the entire venture, as the terminal infrastructure provider will be unable to commit to a slot and vessel.
• The offtakers are now developing a cooperation agreement on (1) LNG demand and (2) negotiating a Terminal Use Agreement and a natural gas transportation agreement (NGTA).

Gas is currently scheduled for delivery in mid-2013.

In addition, the infrastructure provider has committed to a set of financial metrics by February or March 2011.
Should the project be delayed under the restart scenario, the FID will be delayed, and, not only will the competitive position of Jamaica with the infrastructure provider be lost, but, also, the window of opportunity in the current buyers market for LNG.

• The infrastructure provider has stated that the consortium must commit to the FSRU vessel by the end of the current year.
If this window is lost, then the current commitments will be voided, and the costs of the infrastructure will significantly increase.

Moreover, the infrastructure provider may abandon the project, given the delays and uncertainty.

• On the supply side, there has been healthy skepticism from the suppliers as to whether the Jamaica LNG project is real.
A further delay and the uncertainty will most likely cause the suppliers to lose interest, in which case, supplies will find other markets, and the project will likely collapse.
While a project restart, competitive tendering and FEED work might appear on the surface to promise less cost to Jamaica, when all the factors of the venture are taken into account, if the country proceeds down the path of a project restart, the impacts to Jamaica will, most likely, be significantly higher costs as a result of (1) the schedule difference, (2) the loss of competitive infrastructure, and (3) high LNG prices.
In the worse case, failure of the project and, consequently, no natural gas in the country’s fuel mix, will deliver a most significant blow to Jamaica’s economic future.

_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 496 of 609 LNG Investigation Resolution: Continue with the current plan of implementation, allowing DMP to provide informed, timely input.
The Team requests, therefore, that the Cabinet…undertake the following actions: • Sign off on the Implementation Agreement (“IA”) during the week of November 28 • Proceed immediately with the LNG supply acquisition plan.”243 (OCG’s Emphasis) Contrary to the assertions of CH-IV International, that the Independent Consultant Report was not sufficiently informed, the OCG found that the Independent Consultants in their referenced report outlined that they conducted “…preliminary meetings with various officials involved in the LNG Project and in the country’s energy sector.”244 These were as detailed overleaf: 243 Ibid.
244 Independent LNG Assessment Final Report which was dated 2010 November 3 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 497 of 609 LNG Investigation Date (October) Persons Met Notes 4 4 4 5 5 6 5 6 Majorie Johnson, Office of the Prime Discussions of general contract and project Minister Christopher Zacca, OPM issues, coordination, reporting, meetings Hillary Alexander, PS Ministry of Discussion of role of LNG in overall energy Energy Fitzroy Vidal Oral Rainford sector activities; summary of other planning & investment initiatives in sector Nigel Logan, CFO Petroleum View on LNG project structure & gas Corporation of Jamaica Stephen Wedderburn purchasing PCJ – Stephen Wedderburn Discussion on SPV, gas purchase contracts & strategies, bidding process Zia Mian, Director General, OUR Regulation of SPV, gas purchasing, pass- Hopeton Heron throughs for gas & FSRU costs, access to facility JPS: Damian Obiglio, CEO Discussion of SPV, fuel switching, CCGT Robert Dickerman investments Hon.
Audley Shaw, Minister of General project discussion, reporting.

SPV Finance Wayne Henry PCJ – Stephen Wedderburn Further discussions on SPV structure November 4 5 5 Christopher Zacca.

OPM Discussion of findings and recommendations Meeting with HE [sic] Prime Findings and Recommendations Minister, Amb.

Douglas Saunders, Cab Sec, Christopher Zacca, OPM Meeting with HE [sic] Prime Findings and Recommendations Minister, Amb.
Douglas Saunders, Cab Sec, Christopher Zacca, OPM Jamaica LNG Team _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 498 of 609 LNG Investigation It is instructive to note that the Public Officers/Officials with which the meetings were held, all played an integral role and were appointed and/or assigned responsibilities for the LNG Project and/or a component of same, at some point throughout the duration of the project.
In fact, meetings were held with persons, such as Mr. Stephen Wedderburn, who was appointed and/or assigned to the project from inception.
The OCG found that the Cabinet received a submission in connection with a recommendation for the GOJ to enter into an Implementation Agreement with the Exmar Consortium (Jamaica) Limited for the Liquefied Natural Gas (LNG) Project, along with (a) the report from the Independent Consultants (DMP Resources) on the LNG Project, and (b) a response from the LNG Team to the report of the Independent Consultants.
It is instructive to note that at the referenced private meeting which was held on 2010 November 5, between the Hon.

Bruce Golding, Prime Minister of Jamaica, and the Contractor General, Greg Christie, at which time the Prime Minister provided the Contractor General with a draft copy of the referenced LNG Assessment Report.
In the referenced meeting, the Prime Minister also expressed concerns in respect of the Findings of the referenced Report and informed the Contractor General, inter alia, that in the upcoming week he would be addressing the issue by removing the project from the current Ministry (MEM) to the Office of the Prime Minister (OPM), which would assume full responsibility for overseeing the entire project.

It is instructive to note that on 2010 November 29, Cabinet had before it Submission No.
531/MEM-52/10 in regard to the permission, which was being sought to negotiate an Implementation Agreement with the ‘preferred bidder’ for the ‘FSRU LNG Project’.

The Cabinet admitted the following persons to the meeting: Mrs. Hillary Alexander, Permanent Secretary, MEM, Mr. Douglas Leys, Solicitor General, Mr. Glenford Watson, Legal Officer, MEM, Mr. Stephen Wedderburn, LNG Coordinator, PCJ, Mr. Vohn Sachs, Partner, Latham and Watkins, and Mr. Joe Fossella, Consultant, CH-IV International.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 499 of 609 LNG Investigation Cabinet Decision No.

44/10, which was dated 2009 November 29, stated, inter alia, the following: “The report from DMP Resources outlined the results of their assessment of the LNG Project which covered the aspects of technology, risk, timelines and financing.
The report raised issues and made recommendations with regard to regulation, project management and coordination, financial feasibility assessment, deferral of the Implementation Agreement, the reliability of timelines for power plant readiness, the special purpose vehicle (SPV), and the project timelines and impact.
The responses from the LNG Team addressed the issues raised by DMP Resources with regard to the business principles; the commercial structures; and the regulatory framework… The Cabinet highlighted concerns regarding the following issues: • • the gaps identified by the Consultants from DMP Resources and stated in their report; that negotiations for a project of that size and nature were proceeding prior to the institution of a regulatory framework; • having a new and separate regulator and regulatory framework vis-à-vis having the Office of Utilities Regulation (OUR) as regulator, and whether having a separate regulator was feasible, affordable or desirable; • • the likelihood of financial closure without the appropriate regulatory framework being in place; the disparate views of the many State agencies involved and the need for harmonization of the various perspectives on the matter and for a coordinated approach; _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 500 of 609 LNG Investigation • • • • • • the gas demand analysis; the commitment of off-takers to facilitate signing-off on the Implementation Agreement; the risks associated with each of the two options available to either halt the project process and start over again or to address the issues identified and continue the project process; the need to proceed with the Project in the most effective and efficient way possible, in light of the scale of the Project and its expected far-reaching and potential long-term positive outcomes for the country; the concerns of the OUR regarding the proposed conferral of exclusive rights for twenty years, essentially monopoly status; the minimum volume and capacity of the FSRU, and the associated issues of unused capacity and the implications for consumers; • demand and price certainty; the price differential of gas versus oil; certainty and accuracy in terms of throughput, end-users, and firm commitments from prospective off-takers; • • the need for specific and detailed information to be provided on the proposed tax structure and regime, and for research to be done on tax regimes and regulatory frameworks in other jurisdictions; and the need for an approach that brought together and consolidated all the constituents interest and factors, clearly demonstrated the Government’s commitment to the LNG Project and support for its end goals, and advanced the Project process…”245 245 Cabinet Decision No.
44/10, which was dated 2009 November 29.

_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 501 of 609 LNG Investigation The OCG found that the officials who were present in the referenced Cabinet meeting responded to the issues in Cabinet, in accordance with their comments on the LNG Independent Assessment Report.
The OCG found that the Prime Minister, in the Cabinet meeting which was held on 2010 November 29, advised the Cabinet that “…he would assume overall direction for the LNG Project, and a Project Coordination Unit would be established in the Office of the Prime Minister.
He also said he would convene a preliminary meeting that week with the relevant entities to arrive at a definitive position which incorporated all the factors necessary to move the Project forward…” On 2010 December 6, the Cabinet “…agreed that the Submission should be withdrawn from the Agenda; and noted that the draft Implementation Agreement had been finalized and would be referred to the Project Committee established to oversee the direction of the LNG Project, along with the report from the Independent Consultants and the response thereto…”246 Therefore, the OCG found that the decision to remove the Project was based upon the Findings and Recommendations from the Independent Consultants Report.
By way of Cabinet Decision 45/10, which was dated 2010 December 6, the Cabinet also indicated that “…a Project Steering Committee had been established; and the membership comprised named representatives of the Office of the Prime Minister, the Ministry of Finance and the Public Service, the Ministry of Energy and Mining, the Petroleum Corporation of Jamaica, the Attorney General’s Chambers, as well as representatives of the private sector in the persons of Messrs Richard Byles, Howard Mitchell and Peter Melhado…” It is instructive to note that the Prime Minister, the Hon.
Bruce Golding, submitted Cabinet Submission No.

631/CO 10/2010, which was dated 2010 December 9, in which it indicated, inter alia, the following: 246 Cabinet Decision No.

45/10, which was submitted to the OCG, by the Cabinet Secretary, under the cover of letter dated 2010 December 22.

_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 502 of 609 LNG Investigation Steering Committee 1.

Mr. Christopher Zacca 2.


Dr. Wayne Henry 3.

Mrs. Annmarie Rhoden 4.

Mr. Fitzroy Vidal 5.

Ms. Sonia Mitchell 6.

Mr. Parris Lyew Ayee 7.

Mr. Nigel Logan 8.

Ms. Herma McRae 9.

Mr. Richard Byles 10.

Mr. Howard Mitchell 11.

Mr. Peter Melhado 12.

Project Coordinator Core Technical Team 1.

Project Coordinator 2.

Legal and Regulatory 3.

Commercial and Financial 4.

Technical 5.
Government Policy and - - - - - - - - - - - - - - - - Special Adviser to the Prime Minister, Chairman Technical Adviser to the Minister of Finance and the Public Service Deputy Financial Secretary, MFPS Ministry of Energy and Mining (MEM) Office of the Prime Minister (OPM) Chairman, PCJ Group Managing Director (Acting), PCJ Attorney General’s Chambers (AGC) Private Sector Private Sector Private Sector to be urgently sourced and engaged to be engaged Ms. Cherry Lewis, Office of Utilities Regulation (OUR) Mr. Marc Johnson, DBJ Dr. Earl Green, Group Chief Technical Director, (PCJ) Procurement - Mr. Peter Johnson (OUR) Ministerial Committee 1.
Hon.

Bruce Golding 2.

Hon.

James Robertson - - Prime Minister, Chairman Ministry of Energy and Mining _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 503 of 609 LNG Investigation 3.

Hon.

Audley Shaw 4.

Hon.

Laurence Broderick 5.
Senator the Hon, Marlene Malahoo-Forte - - - Minister of Finance and the Public Service Minister of State, Ministry of Energy and Mining Minister of State, Ministry of Foreign Affairs and Foreign Trade Further, by way of a News Release from the OPM, which was dated 2010 December 15, and which was entitled “PM NAMES COMMITTEE AND SETS TARGET FOR LNG PROJECT” it was reported that “Cabinet has approved the new arrangements for the Liquefied Natural Gas (LNG) Project for which Prime Minister Bruce Golding has assumed responsibility.” The referenced News Release further stated the following: “…it was confirmed that a Ministerial Committee has been established chaired by the Prime Minister.
Other members include Energy and Mining Minister, James Robertson; Finance Minister Audley Shaw, State Minister for Energy and Mining, Laurence Broderick and State Minister for Foreign Affairs and Foreign Trade, Mrs. Marlene Malahoo-Forte.

….under the arrangement, a Steering Committee has been established chaired by Christopher Zacca, Special Adviser to the Prime Minister with support from a core technical team.
The Steering Committee will report to the Ministerial Committee at least every two weeks…administrative and related support will be provided by the Office of the Cabinet…” _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 504 of 609 LNG Investigation Recent Developments in regard to the ‘FSRU LNG Project’ Having regard to the fact that the OCG found, and subsequently confirmed, that the OPM assumed overall responsibility for the ‘FSRU LNG Project’, the OCG, by way of a Statutory Requisition, which was dated 2011 February 3, wrote to the Cabinet Secretary to ascertain, inter alia, a detailed list of the established Committees and their respective purposes.
Ms. K. Sewell Mills, responded to the OCG’s Statutory Requisition, for and on behalf of the Cabinet Secretary, by way of a letter which was dated 2011 February 28, and stated the following: “The following are the lists of the Committees and Sub-Committees that have been formed for the basis of providing guidance to the activities related to the proposed Financing, Development, Ownership, Operation of an FSRU LNG Re-gasification Terminal and Natural Gas Transmission System in Jamaica.

a.
a.

Ministerial Sub-Committee: This Ministerial Sub-Committee will oversee the operations of the LNG Steering Committee and advise and update the Cabinet of the progress of the Project.
The members of this Ministerial Sub-Committee are: • Prime Minister- Honourable Bruce Golding, MP • Minister of Energy and Mining - Honourable James Robertson, MP • Minister of Finance and the Public Service- Honourable Audley Shaw, MP • Minister of Transport and Works- Honourable Lester (Mike) Henry, CD, MP • Minister of State, Ministry of Energy and Mining - Honourable Laurence Broderick, MP _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 505 of 609 LNG Investigation b. LNG Steering Committee: The LNG Steering Committee reports to the Ministerial Sub-Committee and, assisted by the LNG Core Technical Team, oversees the overall activities related to the LNG Project.
The members of the LNG Steering Committee are: • Chairman- Christopher Zacca • Project Manager- Ernie Megginson • Ministry of Finance and Public Service- Dr. Wayne Henry • Ministry of Finance and the Public Service -Ann Marie Rhoden • Ministry of Energy & Mining- Fitzroy Vidal • PCJ - Nigel Logan • PCJ - Parris Lyew-Ayee, OD • Office of the Prime Minister- Sonia Mitchell • Private Sector- Richard Byles • Private Sector- Howard Mitchell • Private Sector- Peter Melhado c. LNG Legal and Regulatory Sub-Committee: The LNG Legal and Regulatory Sub-Committee reports to the LNG Steering Committee and oversees the legal and regulatory activities related to the LNG Project.
The members of the LNG Legal and Regulatory Sub-Committee are: • Chairman - Howard Mitchell • Members – Sonia Mitchell (OPM), Cheryl Lewis (OUR), Herma McRae (Att.
General’s Dept) _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 506 of 609 LNG Investigation d. LNG Commercial and Financial Sub-Committee: The LNG Commercial and Financial Sub-Committee reports to the LNG Steering Committee and oversees the commercial and financial activities related to the LNG Project.
The members of the LNG Commercial and Financial Sub-Committee are: • Chairman - Christopher Zacca • Members- Nigel Logan, Richard Byles, Peter Melhado, Peter Johnson, Ernie Megginson, Dr. Wayne Henry and Parris Lyew-Ayee e. LNG Technical Sub-Committee: The LNG Technical Sub-Committee reports to the LNG Steering Committee and oversees the technical activities related to the LNG Project.
The members of the LNG Technical Sub-Committee are: • Chairman - Ernie Megginson • Members- Fitzroy Vidal, Dr. Earl Green, Fritz Pinnock and Worrel Lyew The LNG Steering Committee is in discussions with NEPA to include one of their representatives on the LNG Technical Sub-Committee and expand the role of this sub- committee to include environmental matters.
f. Core Project Team: The Core Project Team reports to the LNG Steering Committee and oversees the basic day- to-day activities related to the LNG Project.
The members of the Core Project Team are: _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 507 of 609 LNG Investigation • Chairman - Ernie Megginson (Project Manager) • Legal & Regulatory- Cheryl Lewis (OUR) • Commercial & Financial- Marc Johnson (DBJ) • Technical- Dr. Earl Green (PCJ) • Govt.
Policy & Procurement- Peter Johnson (OUR)”247 The OCG found that the Cabinet Secretary, Ambassador Douglas Saunders, wrote to the NCC on 2010 December 9 requesting permission to use the Direct Contracting Procurement Methodology to contract Mr. Ernest Megginson as the Project Manager for three (3) months in the amount of US$105,000.00, based upon the following: • “The studies to be commissioned and work activities to be performed are critical to inform the way forward with the LNG implementation, which is of strategic and national importance, and the project is at risk if the new project structure is not implemented on an urgent basis.
Therefore, the contracting of the project manager is urgent; • The required expertise is not readily available locally and Mr. Megginson is available to undertake the assignment immediately; • His knowledge of the international Energy Industry and experience in the project management of global large scale energy projects are extensive.” The NCC, by way of a letter, which was dated 2010 December 20, and which was addressed to the Cabinet Secretary, stated, inter alia, the following: “The National Contracts Commission considered the matter at its meeting held on 2010 December 15 which included a presentation…from the Office of the Cabinet, and requested further and better particulars regarding the selection of Mr. Ernest Megginson as the Project Manager.
247 Response from Ms. K. Sewell Mills, who responded for and on behalf of the Cabinet Secretary, which was dated 2011 February 28.

Response #3 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 508 of 609 LNG Investigation Subsequently the Commission received a letter dated 2010 December 16 containing additional information to support the initial submission by the Cabinet Office.
Having reviewed the matter, the National Contracts Commission offered no objection to the request… The National Contracts Commission’s approval is subject to the Cabinet Office utilizing the three (3) month period to conduct a tender process aimed at procuring the services of a full Time Project Manager for the LNG Project.” The Cabinet Secretary, Ambassador Douglas Saunders, wrote two (2) letters to the NCC on 2011 January 17.
In his first letter, the Cabinet Secretary, stated, inter alia, the following: “The Government of Jamaica under its National Energy Policy has chosen LNG as the preferred alternative energy source in order to deliver vitally needed lower cost energy, both to benefit the citizens of Jamaica, as well as to enable Jamaican industries to be globally competitive.
In October 2010 an independent consultant was engaged to assist the Office of the Cabinet in its assessments of the proposed Project, its technology, risks, timelines and financing.

The report was presented to Cabinet and by Decision No44/10 date 29th November 2010, Cabinet endorsed the formation of a new project management structure to oversee the project.
The project management team is to commission a number of relevant studies and carry out the necessary work activities as outlined by the Project Execution Plan, to inform, drive, and manage the implementation of the LNG Project.

An [sic] LNG Project Task Force/Steering Committee assisted by the LNG Core technical team will oversee the process.

These entities will report to a Ministerial Committee.
The Project Manager has been appointed on 3rd January 2011 to act as Secretary to the LNG project Task Force.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 509 of 609 LNG Investigation The Cabinet Office now requests the permission of the NCC to use the Limited Tendering Methodology to procure a consultancy firm to execute the LNG Commercial Services covering the following activities: • Preparation of RFP for securing the services of LNG Aggregator • Assistance in organizing and participating in discussions with potential LNG Aggregators • Review of bid submittals for LNG Aggregator and recommendation of selected bid • Assistance in negotiating LNG supply contracts and gas sales agreements In accordance with the procurement guidelines, the consulting firms listed below are proposed based on the nature of the work required, their relevant experiences and proven track record within this area.
• Featherwood Capital • DSP Resources • Flower LNG • Galway Group • CH-IV The Cabinet Office’s budget for this activity is Thirty Million Jamaican Dollars (J$30,000,000.00) or Three Hundred and Forty Four Thousand Eight Hundred and Twenty Eight United States Dollars (US$344,828.00).
In his second letter, the Cabinet Secretary indicated, inter alia, the following: “…The Cabinet Office now requests the permission of the NCC to use the Limited Tendering Methodology to procure a consultancy firm to execute the LNG Technical Services covering the following activities: _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 510 of 609 LNG Investigation • Assist in reviewing the technical design and cost basis of the submittals for the LNG receiving and re-gasification facilities and the onshore gas pipeline systems that are required for the LNG Project.
• Assist in the evaluation and assessment of the least-cost alternatives, using best-available technology and industry benchmarks, for the capital and operating costs, as well as energy efficiency, of the proposed facilities.

• Assist in the negotiations with the proposed LNG facilities development companies in finalizing the technical design of the facilities required for the LNG Project.
In accordance with the procurement guidelines, the consulting firms listed below are proposed based on the nature of the work required, their relevant experiences and proven track record within this area.

• Fluor • Aker Solutions • Worley Parsons • Foster Wheeler • CH-IV The Cabinet Office’s budget for this activity is Thirty Million Jamaican Dollars (J$30,000,000.00) or Three Hundred and Forty Four Thousand Eight Hundred and Twenty Eight United States Dollars (US$344,828.00).
The OCG found that on 2011 January 21, the NCC wrote to Ambassador Douglas Saunders, Cabinet Secretary, OPM, with respect to the foregoing requests.
The referenced letter stated the following: “The National Contracts Commission considered the matter at its meeting held on 2011 January 19 and is requesting that the Cabinet Office provide further and better particulars in regard to how the short list of consulting firms were arrived at, the _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 511 of 609 LNG Investigation Selection Methodology as well as how the estimated value of Thirty Million Dollars ($30,000,000.00) was determined.” On 2011 January 24, the Cabinet Secretary, wrote to the NCC and provided the NCC with its rationale for recommending the selected companies to be invited to tender, along with a breakdown of the estimate for the work which was to be undertaken.
The NCC wrote to Ambassador Douglas Saunders, Cabinet Secretary, OPM, on 2011 January 28, regarding the Consultancy Services for LNG Technical and Commercial Services.

In the referenced letter, the NCC stated, inter alia, the following: “The matter was again considered at the NCC’s meeting held on 2011 January 29 when your letter dated 2011 January was tabled.
Having reviewed the matter, the National Contracts Commission offered no objection for the Cabinet Office to utilize the Limited Tender Procurement Methodology…” By way of the LNG Steering Committee Status Report of 2011 February 7, the OCG found that the RFP’s were“… issued for LNG Commercial and Technical Advisors.” Due to the fact that the referenced procurements are associated the ‘FSRU LNG Project, the OCG will continue to monitor this component of the LNG Project in accordance with the provisions of the Government of Jamaica (GOJ) Handbook of Public Sector Procurement Procedures (Revised 2010 October which was made effective 2011 January).
The OCG, in its Follow-Up Requisition to the Cabinet Secretary, Ambassador Douglas Saunders, OPM, which was dated 2011 February 3, posed, inter alia, the following question: “Please provide an Executive Summary detailing the current role(s) and responsibility(ies) of the Office of the Prime Minister in the implementation of the proposed Financing, Development, Ownership, Operation of an FSRU LNG Re- _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 512 of 609 LNG Investigation gasification Terminal and Natural Gas Transmission System in Jamaica.”248 Ms. K. Sewell Mills responded to the OCG’s Statutory Requisition on 2011 February 28, for and on behalf of the Cabinet Secretary, and stated the following: “The LNG Project Oversight Committee will be comprised of the Honourable Prime Minister, as the Chairman, and other ministers to be determined.
This Ministerial Committee will oversee the operations of the LNG Steering Committee and advise and update the Cabinet of the progress of the Project.”249 The OCG, in its referenced Requisition, further posed the following question: “Please provide an Executive Summary detailing the basis upon which the ‘negotiations’ which are currently underway with the ‘preferred bidder’, the Exmar Consortium, are being undertaken, in regard to the proposed Financing, Development, Ownership, Operation of an FSRU LNG Re-gasification Terminal and Natural Gas Transmission System in Jamaica.”250 Ms. K. Sewell Mills, in her response to the OCG’s Statutory Requisition, stated the following: “The LNG Steering Committee has not initiated negotiations with the Exmar Consortium pending the completion of the following tasks: a.
A comprehensive review of the proposed costs of the FSRU LNG Re-gasification Terminal and Natural Gas Transmission System, including the benchmarking of these costs against recent projects of similar scope around the world.

b.

The completion of a risk assessment of the project.

248 OCG’s Requisition to the Cabinet Secretary, which was dated 2011 February 3.

Question #1 249 Response from Ms. K. Sewell Mills, who responded for and on behalf of the Cabinet Secretary, which was dated 2011 February 28.
Response #1 250 OCG’s Requisition to the Cabinet Secretary, which was dated 2011 February 3.

Question #2 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 513 of 609 LNG Investigation c. The finalization of a regulatory framework, which will form the basis for negotiating the tariffs for the FSRU LNG Re-gasification Terminal and Natural Gas Transmission System.
d. Resolution of the issues related to exclusivity and taxes in the draft Implementation Agreement”.

The OCG further found by way of Notes from the Meeting of the Liquefied Natural Gas (LNG) Core Project Team which was held on 2011 January 13, that “Mr.

Megginson informed the meeting that he has requested that the representatives from CH-IV, namely, Mr. Joseph Fossella and Mr. Pat LaStrapes have been removed [sic] from the project.
Discussions were ongoing regarding a replacement…” (OCG’s Emphasis) The Hon.

Bruce Golding, on 2011 April 7, submitted to the OCG, a copy of two (2) Legal Opinions, which were prepared by Attorneys-at-Law, Livingston, Alexander & Levy, in regard to the procurement procedures for the ‘FSRU LNG Project’.

The first Opinion, which was dated 2011 March 24, stated, inter alia, the following: 1.
“Where a competitive tender is required, usually invitations are sent to contractors within the particular field of expertise.

It is a well established principle of law that there is an implied obligation that Tenders are to be considered fairly.

Accordingly, there is an implied term to act in good faith.

2.

A review of the Bid Evaluation Report shows Joseph Fossella attending several of the meetings concerning the evaluation of the bids and also reports that were rendered on behalf of CH*IV.

3.
3.

An email from Craig Anderson of Black & Veatch Corporation to Mr. Christopher Zacca on the 14th day of February 2011 states, that Fossella worked for Black & Veatch as a Consultant until April 18, 2009.

_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 514 of 609 LNG Investigation 4.
…Tom Norton of Excelerate Energy…confirmed that Mr. Joe Fossella formally of Black & Veatch Corporation, whilst still at Black & Veatch started the LNG Liquefaction Alliance Project between Black & Veatch, Excelerate and Exmar, and worked on the project for six or seven months up to his retirement.

5.
5.

It is manifestly clear…that Joe Fossella did have some connection with Exmar at the time when the alliance was formed and he worked on it for some time at least until 2009 not a long period before his engagement in the LNG project for PCJ.

Certainly, questions arose as to whether he was able to give an independent evaluation of the competitive bid between Hoegh and Exmar.
It is submitted that Mr. Fossella ought not to have participated in the evaluation of the rival bids so soon after working with Exmar in the alliance up to 2009 because he would not have been able to bring an independent and open mind.

6.

A review of Stephen Wedderburn’s statements concerning Exmar clearly shows that he ought not to have participated in the evaluation process, particularly the e-mail of the 6th September 2009 which clearly shows that he had a pecuniary interest in a project with Exmar.
It is trite law that a person who has the proprietary or pecuniary interest in a matter should not participate in a situation where a decision has to be made concerning a party in which the participants has such an interest.

Mr. Wedderburn having a pecuniary interest in a project with Exmar, as is clear from his e-mail and other e-mails describing them as the front runner and other such similar statements ought not to have participated in any way in the bid evaluation.
Moreover, it is remarkable that in the e-mail of the 6th September 2009 he stated he would not participate in the bid evaluation, nevertheless, he participated in several meetings.

_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 515 of 609 LNG Investigation 7.

Consequently, it is clear that the decision is tarnished as the tender process could not be considered as transparent, fair or unbiased.

8.
8.

It is manifestly clear therefore that the evaluation done by CH-IV International is incorrect as Excelerate Energy was not a part of the Exmar Consortium…The review having stated the relationship between Exmar and Excelerate, as joint venture partners, clearly shows that Excelerate ought to have been invited to tender.
This certainly casts a very serious and grave concern on the tender process for Exmar to have been declared the preferred bidder, when its joint venture partner who the review determined as Exmar’s strength was excluded.

It is therefore inconceivable to comprehend on what basis Exmar could be determined the preferred bidder in view of the foregoing and clearly gives the inference of apparent bias and lack of good faith.

9.
9.

The only reasonable conclusion that can be drawn is that the Request For Proposal was not sent to Excelerate so as to exclude them.

10.

It is also interesting to observe that when one looks at the scores given by CH-IV International and those of the Bid Evaluation Committee they are virtually identical.

There can be no question that it is clear that CH-IV International’s valuation must have influenced the Evaluation Committee.

11.
11.

Although the Bid Evaluation Committee was set up to determine the two bids that were received nevertheless the decision of the Committee can be discredited as a review of the facts clearly indicate that persons who had an apparent conflict of interest were permitted to participate in the evaluation of the bids and were at several meetings and consequently could have influenced the outcome of the bids.

12.
12.

The tender process was seriously flawed from its inception as the invitation to tender was not sent to all persons who had the requisite expertise and were leaders in the _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 516 of 609 LNG Investigation field…Certainly it is a cardinal principle of a competitive tender process that all the players in the field should be invited to tender.
It certainly is unfair, lacks transparency and good faith when the lead players are omitted...

The tender process in this regard is flawed and could not withstand scrutiny under judicial review.”251 (OCG’s Emphasis) The second Opinion, which was dated 2011 March 29, stated, inter alia, the following: 1.

“Although Moore left the PCJ in November 2008, it is relevant to consider his knowledge concerning the LNG Project.
In this regard, it is of paramount importance to begin by examining in particular an e-mail from as far back as February 1, 2008 from Stephen Wedderburn to Ian Moore.

It is manifestly clear in this e-mail that there had been prior discussions between Wedderburn and Moore concerning the prospective LNG Project.
In the first paragraph Wedderburn refers to a previous note regarding a Norwegian company which would not be a provider of LNG but rather would be a competitor to Exmar to supply the floating regas facilities.

Wedderburn then indicated that it raises a point which he wants to discuss with Moore which is how to treat the other companies who are interested in providing floating regas solutions.

There can be no doubt that at this point in time; consideration was being given to the FSRU aspect of the project.
2.

This e-mail certainly confirms that there was discussion concerning the potential applicants for the FSRU project and makes it abundantly clear that the preferred person was Exmar.

251 Legal Opinion, which was prepared by Attorney-at-Laws, Livingston, Alexander & Levy on 2011 April 7.

_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 517 of 609 LNG Investigation 3.
Whilst we have no other e-mails passing between them between February an [sic] November which is unfortunate, the last e-mail is on the 6th day of November 2008 in which he sends a press release from Exmar on the 5th day of November 2008 which announces the formation of an alliance to advance its efforts in the development of floating liquefaction solutions…In the e-mail Wedderburn states, that he was pleased to have played a role in introducing Exmar and Black & Veatch to each other.
The foregoing clearly shows that Wedderburn’s bias in favour of Exmar to the exclusion of all other potential applicants.

There can be no doubt that his views in favour of Exmar as frontrunner and other laudatory comments on Exmar would have some influence on Moore.

4.

Certainly, Moore’s action hereinafter is germane as it is indicative that he was aware that there was an opportunity in which he can engage in and benefit from the project.
First, Moore had a company incorporated in the British Virgin Islands and thereafter a company incorporated in Jamaica on the 19th day of June 2009 under the name “EDC LNG Limited”.

5.
5.

It is of paramount importance to appreciate that the Request for Proposals was issued on the 12th day of November 2009, shortly thereafter, Moore had the name of the company changed to “Caribbean LNG (Jamaica) Limited”… Thereafter, even more remarkable that when the Exmar Consortium sent in its proposals, that CLNG was a member of the Exmar Consortium.

It is therefore clearly obvious that the name change bore relationship to the submission by the Exmar Consortium.

6.
…There can be no doubt that the information that he had concerning Exmar, the tender process and most importantly information on how to put together a strong tender in conjunction with his subsequent participation within the Exmar Consortium, when it is appreciated that he was a former Chairman of the PCJ makes it obvious to _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 518 of 609 LNG Investigation any innocent bystander that there is a lack of transparency in the tender process and if not, unfairness.
7.

…CLNG was a partner in Exmar Consortium.

Comment must also be made that it was a partner in a venture that it could not be making any substantial financial contribution to the capital expenditure thereof.

This raises the question, when was it then necessary to involve CLNG as a partner to the Consortium in a venture of this nature as far as the tender process is concerned.
Certainly, Moore’s corporate profile shows that he lacks the expertise necessary to play a pivotal role in any project of this nature.

8.
…It is known that other parties who should have participated were not given the opportunity to do so, as the Request For Proposals [sic] were not given to them…This is clearly as [sic] case of being biased and was certainly designed to reduce any competition that Exmar may have had particularly from Excelerate who was the leader in the field.” (OCG’s Emphasis) The OCG notes that the referenced Legal Opinions, which were obtained from the private Bar, support certain of the considered Conclusions which have been detailed herein.
More specifically, the Legal Opinions have been able to establish a prima facie case of improper and irregular conduct on the part of certain present and former public Officials/Officers and, in consequence, support certain of the OCG’s Findings which are detailed herein.
In point of fact, the referenced Legal Opinions clearly indicate that “The tender process in this regard is flawed and could not withstand scrutiny under judicial review.”252 It is without fear of contradiction that the OCG must reiterate its stated position that the referenced procurement process is one which has exhibited signs of irregularity, impropriety, undue influence, the use of ‘sensitive insider information’ by former Public Officer in their now current private capacities and potential conflicts of interest, amongst other concerns.
Further, and having regard to the OCG prior concerns, which were stated in its letter of 2010 252 Legal Opinion which was prepared by Attorney-at-Laws, Livingston, Alexander & Levy on 2011 April 7.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 519 of 609 LNG Investigation June 22, it is instructive to note that the OCG, by way of a letter, which was dated 2010 November 16, had in fact advised Mr. Glenford Watson, Senior Legal Officer, MEM, “to summarily and immediately abort the subject process”.
It is instructive to note that the OCG’s recommendation to the MEM came at a time when its Investigation was ongoing and had already been informed by sworn statements and supporting documentary evidence.

Needless to say, such a recommendation was not accepted by the GOJ and/or its affiliate agencies.
Having regard to the fact that the ‘FSRU LNG Project’ continued unabated throughout the life of the OCG’s Investigation, the OCG, by way of a Follow-Up Requisition to the Cabinet Secretary, Ambassador Douglas Saunders, OPM, which was dated 2011 March 30, posed the following question: “Please provide a current status update of the LNG Project, in particular, the proposed Financing, Development, Ownership, Operation of an FSRU LNG Re-gasification Terminal and Natural Gas Transmission System in Jamaica.”253 The Office of the Cabinet, by way of its response to the OCG’s Statutory Requisition, which was dated 2010 April 18, stated, inter alia, the following: “The current status of the LNG Project is: • LNG Supply – Road show presentations were held with various LNG suppliers in Houston, Texas during March 8-17, 2011.
An [sic] RFP is being prepared for LNG supply with plans to issue in late May or early June 2011.

253 OCG’s Statutory Requisition to the Cabinet Secretary, Ambassador Douglas Saunders, OPM, which was dated 2010 March 30.

Question #1.

_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 520 of 609 LNG Investigation • LNG Offtake – Key offtakers (e.g.
JPS/Marubeni, JEP and Jamalco) worked with LNG Project team to confirm their natural gas requirements for a base load projection.

• Regulatory Framework – A draft regulatory framework document was prepared and reviewed by LNG Legal & Regulatory Sub-Committee and external legal counsel.

• Infrastructure – Discussions were held with the Port Authority of Jamaica regarding confirming site selection for FSRU and with NEPA regarding the environmental permitting requirements of the infrastructure.
No negotiations have been held with the Exmar Consortium.

Meeting was held with Ministerial Sub-Committee on April 13, 2011 where the LNG Steering Committee submitted its recommendation for cancelling the former tender for the Financing, Development, Ownership, Operation of an [sic] FSRU LNG Re-gasification Terminal and Natural Gas Transmission System issued by PCJ in November 2008 and re-tender the FSRU and onshore natural gas pipelines in separate RFPs.
• Advisor – The LNG Project team has engaged a Financial Advisor (Taylor-Dejongh), an [sic] LNG Commercial Advisor (Featherwood Capital) and an [sic] LNG Technical Advisor (WorleyParsons).”254 (OCG’s Emphasis) Based upon the foregoing, the OCG has found that the newly established LNG Steering Committee within the OPM has taken a decisive step to recommend, in light of the referenced Legal Opinions, that the process for the ‘FSRU LNG Project’ be re-tendered.
The Office of the Cabinet, by way of its response to the OCG’s Statutory Requisition, which was dated 2010 April 18, submitted a copy of a Memo that was prepared by the Solicitor General, Mr. Douglas Leys, which was dated 2011 April 11, and which was captioned “Opinion by Livingston Alexander & Levy concerning Tender Process for the LNG Project”.
The referenced Memo stated, inter alia, the following: 254 Response from Ms. K. Sewell, for and on behalf of the Cabinet Secretary, OPM, which was dated 2011 April 18.
Response #1 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 521 of 609 LNG Investigation “…You have asked for my comments on the above captioned opinion by Messrs. Livingston Alexander & Levy Attorneys-at-Law…I have reviewed the said opinion and am in substantial agreement with the views posited by the Attorneys… …On the assumption that those factors mentioned in the opinion are true, the bidding process on a whole in this matter would be regarded by a court as being unfair and not implemented in good faith.
The issues upon which such a finding would be made are summarized as follows: (i) Excelerate was an applicant in a pre-qualification process for the FSRU-LNG project in Jamaica in 2007.

Its application was late.

That process was never completed.

Only the same applicants for the 2007 pre-qualification were invited to participate in the RFP process in 2009.

Excelerate was not invited.

This is both a good faith and fairness issue.


(ii) Joe Fossella albeit not a member of the bid evaluation team was an influential factor in the evaluation of the bids.

The opinion infers that he had a prior association with Exmar for a period which was sufficiently close to the time it submitted its bid for him not to be a totally disinterested person.

If this inference is correct there is a fairness issue as far as Joe Fossella is concerned.

(iii) Excelerate was assessed as part of the Exmar bid i.e.
as part of the consortium.

It was also assessed as being an integral part of the consortium albeit it was never presented by the other members of the consortium as being a part of it.

This is a compliance, fairness, and good faith issue.

(iv) Stephen Wedderburn albeit not a member of the bid evaluation team was also an influential factor in the evaluation of bids.
He had stated in an email dated February 1, 2008 to Ian Moore the then Chairman of PCJ that Exmar was a clear front runner even before the bids were in.

In addition he has admitted _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 522 of 609 LNG Investigation that he had a pecuniary interest in the outcome of Joint Venture between Exmar and another company in Columbia.

This is a fairness issue.


(v) Mr. Ian Moore was the former Chairman of PCJ, the owner.

Mr. Moore and Mr. Wedderburn collaborated about the project when he was Chairman.

Approximately 7 months after he left the PCJ as Chairman, he incorporated a company which became a part of the Exmar consortium.

Mr. Moore by virtue of his position and collaboration with Stephen Wedderburn on the project would have had information on the same.
The fact that he formed a company shortly after leaving PCJ, which company was part of the Exmar Consortium raises an issue that he was privy to inside information which he used for a material benefit.

This raises a fairness issue and a good faith issue.
For these reasons I support the conclusion in the opinion that on a whole the integrity of the tender process was compromised.” The foregoing opinion from the Solicitor General, which is the Attorney for the GOJ, supports and confirms the reasoning and substantive legal issues which were delineated in the Legal Opinions from Livingston, Alexander and Levy, private Attorneys-at-Law.
Collectively, the Legal Opinions from the Solicitor General and Livingston, Alexander and Levy, Attorneys-at-Law, have unequivocally brought into sharp focus the issue of the lack of fairness and transparency in the tender process for the ‘FSRU LNG Project’.
Further, the issues of a conflict of interest and the probable use of ‘insider information’ on the part of Mr. Ian Moore, former Chairman of the Board, PCJ, are matters which have compounded and brought into greater disrepute the legitimacy, fairness and transparency of a poorly planned and executed tender process which was driven, in large, by the technical expertise of Mr. Stephen Wedderburn, the LNG Project Coordinator, PCJ.
It must, however, be clealy recalled that Mr. Stephen Wedderburn, by his own admission and in _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 523 of 609 LNG Investigation his sworn declaration to the OCG, which was dated 2010 November 15, divulged his prior business association with Exmar Marine NV and indicated, as follows: “In the period December 2008 to June 2009, when I was not a public official, I was involved on a part-time basis in attempts to broker a floating liquefaction project to facilitate the export of LNG from Colombia.
Exmar N.V. was a client of the brokerage firm, Annica, with which I was involved and in the conduct of this engagement I liaised with Mr. Bart Lavent, Managing Director – LNG, Exmar N.V. As part of my activities I met with several gas companies in Colombia, including Promigas who has now become a member of the Exmar Consortium.

These interactions were solely in respect of the Colombian project.
I have received no remuneration in respect of these activities as my involvement was purely on a success basis in which I would be remunerated only if a Final Investment Decision were taken in regard to the project.
The Colombian floating liquefaction project has not been realized.”255 In light of the foregoing, the OCG has found that Mr. Stephen Wedderburn, due to his prior association with Exmar Marine NV, which was of a pecuniary nature, is in a conflicted and highly invidious position and, as such, should not have been permitted to play any role, whatsoever, in the tender process and, in particular, the considerations which have lent themselves to the selection of a ‘preferred bidder’.
The OCG was also made aware of the existence of an alleged third party Legal Opinion which allegedly challenged the referenced Legal Opinions from Attorneys-at-Law, Livingston, Alexander and Levy with respect to the ‘FSRU LNG Project’.
Of significant interest to the OCG was the fact that the OCG was informed that the referenced alleged third party Legal Opinion was developed and/or written by/or with the assistance of someone who was attached to the MOFPS and/or who was instrumental in the drafting or development of the GOJ Public Sector Procurement Procedures.

255 Response from Mr. Stephen Wedderburn, LNG Project Coordinator, PCJ, which was dated 2010 November 15.
Response #42 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 524 of 609 LNG Investigation Of even greater significance was the fact that it was further brought to the attention of the OCG that the referenced alleged third party Legal Opinion had found its way into the possession of Mr. Paul East, Director, CLNG.
In an effort to secure the formal submission of the referenced Legal Opinion, the OCG wrote to Mr. Paul East, Director, CLNG, by way of a Statutory Requisition, which was dated 2011 April 29.

The referenced OCG Statutory Requisition posed, inter alia, the following questions and requisitions: “Please provide a copy of the referenced document as a formal attachment to your response to the OCG’s Statutory Requisition.
Please provide an Executive Summary detailing the nature and content of the referenced ‘document’.

The Executive Summary should include, inter alia, the following: i.

A detailed response attesting to the legitimacy of the referenced ‘document’; ii.

The complete name (s) and substantive title(s) of the author(s) of the ‘document’; iii.

The name of the entity and/or institution, whether public or private, from which the referenced document emanated; iv.
The date, time and circumstances by which you came to be in possession of the referenced document, inclusive of the name(s) and title(s) of the person(s) and/or entity(ies), whether public or private, who/which provided you with the referenced ‘document’; v. The reason(s) and basis, if any, which were given by the named person(s) and/or entity (ies) for providing you with the referenced ‘document’.
Are you aware of any other person(s) who, to date, has/have seen and/or been made privy to the referenced ‘document’?

If yes, please provide full particulars of the identity of the referenced person(s), inclusive of their name(s) and title(s), and the circumstances under which the named person(s) became privy to the referenced ‘document’.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 525 of 609 LNG Investigation Has anyone assisted you in completing this Requisition and/or answering the OCG’s questions?

If yes, please provide the following information: a.

The name(s) and title(s) of the person(s) who assisted you in completing this Requisition and/or answering the OCG’s questions; b.
The nature of your relationship, if any, with the person(s) identified in (a) above; c. The nature of the assistance rendered to you in completing this Requisition and/or answering the OCG’s questions.

Have you consulted and/or collaborated with anyone (a) in your efforts to complete this Requisition and/or (b) in the formulation of your responses to the questions which have been posed to you in this Requisition?

If yes, please provide the following information: a.
The name(s) and title(s) of the person(s) with whom you consulted and/or collaborated in completing this Requisition and/or answering the OCG’s questions; b.

The nature of your relationship, if any, with the person(s) identified in (a) above; c. The question(s) of this Requisition in respect of which the consultation and/or collaboration was undertaken by you (Please state the respective Question #’s and sub-parts, where applicable).
d. The nature of the consultation and/or collaboration which was undertaken by you in completing this Requisition and/or in answering the OCG’s questions.

Are you aware of any additional information which you believe could prove useful to this Investigation or is there any further statement in regard to the Investigation which you are desirous of placing on record?
If yes, please provide full particulars of same.”256 Mr. Paul East, in his response to the OCG’s Statutory Requisition, which was dated 2011 May 3, stated, inter alia, the following: 256 OCG’s Statutory Requisition that was addressed to Mr. Paul East, Director, CLNG, which was dated 2011 April 29.

Questions #1(a), 1(b), 3, 4 & 5.


_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 526 of 609 LNG Investigation “The referenced document is provided herewith under the cover of Attorney-at-Law David Won Ken’s letter; The referenced document is a legal opinion i. ii.

iii.

iv.

v. It is legitimate; It was authored by attorney-at-law David Wong Ken; It emanated from the law firm Wong Ken & Co.
The referenced document was received by me on or before 21st April 2011.

The referenced document was provided to me by attorney-at-law David Wong Ken.

I received the referenced document in my capacity as a director of a member of the Exmar Consortium; The referenced document was given to me by David Wong Ken in discharge of his obligation as attorney-at-law for the Consortium.
…To the best of my knowledge only the members of the Exmar Consortium and their duly appointed officers and attorneys have seen the referenced document.

Yes, attorney-at-law David Wong Ken assisted me with the completion of this Requisition.

a. Attorney-at-Law David Wong Ken is for the purpose hereof the local Attorney-at- Law for the Consortium; b.
Legal representative; c. The assistance rendered to me is in the nature of legal assistance; Yes, I have consulted with Attorney-at-Law David Wong Ken in completing the OCG’s Requisition.”257 It is instructive to note that attached to the referenced response from Mr. Paul East, Director, CLNG, was a letter to the OCG from Attorneys-at-Law, WongKen & Co, which was dated 2011 May 3.

Please see below a copy of the said letter: 257 Response from Mr. Paul East, Director, CLNG, which was dated 2011 May 3.
Responses # 1(a), 1(b), 3, 4 & 5.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 527 of 609 LNG Investigation _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 528 of 609 LNG Investigation Having regard to the conditions and restrictions which were outlined in the foregoing letter, the OCG took a decision not to review the Legal Opinion which was reportedly prepared by Attorneys-at-Law, WongKen & Co. Consequently, by way of letter, which was dated 2011 May 4, the OCG returned the referenced Legal Opinion to Mr. David Wong Ken, Attorney-at-Law, WongKen & Co, without reading and/or retaining a copy of same.
Detailed overleaf is a verbatim copy of the referenced OCG Letter of 2011 May 4 which particularized, inter alia, the OCG’s position: _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 529 of 609 LNG Investigation _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 530 of 609 LNG Investigation _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 531 of 609 LNG Investigation Having regard to the foregoing, the OCG is unaware of the material content of the Legal Opinion which purportedly emanated from WongKen & Co., and which was reportedly prepared on behalf of the Exmar Consortium.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 532 of 609 LNG Investigation OCG’s Observation This period highlights the initiation of certain discussions into LNG as an alternative source of energy to Jamaica.
TIMELINE OF SIGNIFICANT EVENTS Timeline 2001 April Occurrence Mr. Anthony Hylton was appointed Minister of Mining and Energy the (MME) during which “… the Ministry formulation of an energy policy and strategy, which called for the diversification of energy sources to include LNG, coal and renewables i.e.
wind, solar, thermal etc.” commenced of MME, Mr. Zia Mian also indicated that he was the Energy Advisor to the then Minister and that “…Jamaica recommended should consider the natural gas as a potential diversification fuel to generate electricity and steam from the bauxite/alumina sectors…” 2004 August 2008 August – Stephen Wedderburn was engaged by the PCJ as Group Technical Director of the PCJ.
2004 November 9 MOU entered into between the National Gas Company of Trinidad and Tobago Limited (NGC) and the PCJ.

2005 September 12 Initial contract between PCJ and the Technical Consultants, CH-IV International was approved by the Cabinet.

2006 August 3 Front End Engineering Design (FEED) Study on LNG which was conducted by Mustang Engineering for the PCJ and the National Gas Company of Trinidad and Tobago Limited in which a land-based facility was being considered.
No other formal studies or pre- assessments were conducted by the MEM or the PCJ for the ‘FSRU LNG Project’ _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 533 of 609 LNG Investigation Timeline 2006 December 1 Meeting OCG’s Observation From as early as 2006, Exmar Marine NV was courting the GOJ with respect to introducing LNG to Jamaica.
Occurrence held Jamaica, Mr. between Mr. Anthony Hylton, in his capacity as Minister MoFAFT, of representatives from the Embassy of Stephen Wedderburn, Mr. Nicolas Saverys and representatives from the Exmar Marine NV and other affiliates of the said company in Brussels, Belgium.

A Meeting was held in which a presentation was made by Exmar Marine NV to the MEM and the PCJ.

The meeting was chaired by the former Minister, Mr. Anthony Hylton.
2007 January 9 2007 March Another presentation was given by Exmar Marine NV and, thereafter, a ‘Mandate’ was given to Exmar Marine NV by the GOJ to assist the Government in purchasing LNG and/or natural gas.
The former Minister Mr. Anthony Hylton stated in his response to the OCG’s Statutory Requisition, which was dated 2011 February 4, inter alia, that “…’Mandates’ were signed between 2006-2007 between a number of possible LNG providers in the LNG industry in an effort to identify supplies of LNG which could be supplied by Trinidad…” Whereas a Mandate was signed between the GOJ and Exmar Marine N.V., the OCG found no evidence that a mandate was also provided to the other LNG providers.
2007 April 2007 May 25 The Invitation to Pre-qualify was issued by the PCJ.

Deadline for the submission of the proposals from the prospective bidders for the pre-qualification exercise.

Nine submitted proposals.

(9) companies/consortia The OCG qualification completed.
found that exercise was the pre- not _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 534 of 609 LNG Investigation Timeline Occurrence OCG’s Observation 2007 December 7 Mr. Ian Moore was appointed the Chairman of the PCJ Board of Directors.
2007 December to 2008 August 6 Several pieces of correspondence were exchanged between Mr. Ian Moore, Mr. Stephen Wedderburn, Mr. Bart Lavent of Exmar Marine NV, Mr. Conrad Kerr (a then representative of Merrill Lynch and current partner in CLNG), amongst others.

2008 November Mr. Ian Moore demitted Office as Chairman of the PCJ Board.

2009 May 5 2009 May Prime Minister in Budget Presentation that Jamaica will pursue an LNG Project.
announces Stephen Mr. Wedderburn submitted a proposal to the MEM to coordinate the Liquefied Natural Gas Project.

The email correspondence highlighted a concerted effort to introduce LNG to Jamaica, where information was being shared by the named parties.

The proposal which was submitted to the MEM by Mr. Stephen Wedderburn was, inter alia, against utilizing the GOJ Public Sector Procurement Procedures to award and implement the ‘FSRU LNG Project’.
Mr. Stephen Wedderburn proposed that “…rather than going through a formal procurement system to select an FSRU provider (which will waste time and unduly delay the execution of more important aspects of the Project such as the identification of LNG supply) that one of these two companies be selected by interview.”258 Mr. Stephen Wedderburn identified and ranked two (2) companies, namely, Exmar Marine NV and Golar, and the only they were stated companies to “…actually have floating regasification in operation…”259 systems that 258 Ibid.11.
259 Ibid.

11 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 535 of 609 LNG Investigation Timeline 2009 September Occurrence Meeting was held with the Hon.

Bruce Golding, the Hon.

Daryl Vaz, Mr. Ian Moore and Mr. Paul East of CLNG.

OCG’s Observation This meeting was in regard to the pre- feasibility study which was undertaken by EDC LNG (now CLNG), Promigas and Exmar Marine NV.
referenced The representatives presented a copy of the completed feasibility study to the Prime Minister.

initiative that would The OCG was informed by Mr. Ian Moore that “Initially we disagreed with HPM and said this is a private sector see electricity pricing going down by more than 30% HPM then countered by saying what if another company said they could lower the cost by 40% that could cause a problem so he said he saw no way but to go to bid.” 2009 October 28 Cabinet approved, by way of Decision No.
44/09, the use of the Floating Storage Re-gasification Unit (FSRU) for the importation of Liquefied Natural Gas.

2009 October The pre-feasibility study which was conducted by EDC LNG (now CLNG), Promigas and Exmar Marine NV was completed.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 536 of 609 LNG Investigation Timeline 2009 November 4 Occurrence Permanent Secretary in the MEM sent a letter sent to the NCC seeking permission to issue the RFP for the LNG FSRU Project to the nine that previously submitted proposals in the 2007 prequalification exercise.
(9) companies OCG’s Observation The OCG found that there was a sense of urgency by the MEM to ensure that certain timelines were met for the ‘FSRU LNG Project’.

be the letter, received referenced In the Permanent Secretary indicated that “…it is extremely desirable that proposals from interested applicants by January 2010.
This will not be likely unless the the RFP coming weeks (preferably by November 11, 2009), in order to meet the projected timelines…” issued within is 2009 November 5 NCC endorsed The the recommendation of the Permanent Secretary in the MEM “…to utilize the Limited Tender Methodology to invite the nine (9) consortia who had submitted application for pre- qualification…” 2009 November 12 & 13 The RFP was issued for the ‘FSRU LNG Project’ 2009 December 8 Meeting of the PCJ Board of Directors Nine The pre-qualified (9) companies/Consortia were in receipt of a copy of the RFP.
The Minutes of the Meeting record that there were certain concerns which were the PCJ Board of expressed by Directors in regard to the guidelines which were used by Mr. Stephen Wedderburn along with the LNG Steering Committee in the preparation of the RFP.
2009 December 8 & 9 Scheduled potential bidders site visit for the _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 537 of 609 LNG Investigation Timeline 2009 December 22 2010 February 12 Occurrence The deadline for submission of the proposal was extended by way of an Addendum, which was sent via email correspondence to the nine (9) potential bidders from January 5, 2010 to February 15, 2010. for Review A ‘Bid Evaluation Matrix Report: and Framework Evaluation of Proposals’ was prepared by the Consultants, CH- IV International for use during the evaluation of the bids.
The Bid Evaluation Matrix contained a ‘Review Matrix’.

The that “…each Report Proposal will objectively reviewed against the following sub- criteria for each category…” indicated be OCG’s Observation The OCG was not provided with any evidence to suggest that the bidders informed, by way of an were Addendum, or otherwise, of the ‘Review Matrix’.

The referenced document was prepared three (3) days prior to the deadline for the submission of the bids.
2010 February 15 the The extended deadline for Tender Closing and Opening of the bids.

Two (2) bids were received from Hoegh the Exmar and Consortium.

LNG The OCG found that a third bid was received from Golar LNG, by way of an email after for the deadline submission.

This bid was rejected.


_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 538 of 609 LNG Investigation Timeline 2010 February 16 Occurrence Presentation of Proposals on the ‘FSRU LNG Project’ by the potential bidders who submitted a bid.

OCG’s Observation There was no established basis upon which the potential bidders were instructed to present their proposals as it was not used in the Evaluation of the Bids.
This was confirmed by way of a letter from Mr. Godfrey Perkins, Secretary of the PCJ Procurement Committee, to Dr. Audley Darmand, Chairman of the PCJ’s LNG Technical Evaluation Committee which was dated 2010 March 29, in which it was stated that “Please actual Presentation of the submission by the bidders was not considered as, was not interpreted as and did not form a part of the Bid Evaluation Process by any aforementioned the of member Committee…” note that the No rationale was provided by the PCJ with respect to the intended purpose for the referenced presentations.
2010 March 29 Mr. Arthur Ransome, Vice President & General Manager of CH-IV provided Dr. Audley Darmond with “…a summary of the attributes of each proposal submitted and the final scores…”, inter alia, a which outlined, summary of the scores which were allotted to the evaluated bids.

2010 March 29 the LNG The Chairman of Technical Evaluation Committee gave its recommendation by way of a Final Report.
The OCG found that the Report, which was submitted by the Chairman, was similar report which was submitted by CH-IV International.
the to _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 539 of 609 LNG Investigation Timeline 2010 April 5 Occurrence CH-IV International wrote to Dr. Audley Darmand, Chairman of the PCJ Technical Evaluation Team, in regard to certain concerns which were the PCJ Procurement Committee with respect to: expressed by 1.

Particulars of the principals of each of the three entities within Exmar consortium … 2.
Corporate and financial profile of CLNG as well as the experience of this company in the business of LNG supplies... 2010 April 8 New contract signed between CH- IV International and the PCJ.

2010 April 12 Mr. Godfrey Perkins, Secretary, PCJ Procurement Committee, wrote to the then Group Managing Director, Dr. Ruth Potopsingh, expressing concerns in regard to the Evaluation Report which was received from CH-IV International for the proposed ‘FSRU LNG Project’.
OCG’s Observation found the PCJ The OCG that Procurement Committee expressed concern with regard to the structure of in the Exmar Consortium particular, CLNG, whose corporate and financial profile was not provided.

and, The OCG found that the letter from CH-IV International sought to explain the basis upon which the Exmar Consortium was selected, the structure of the Consortium and the role of each member of the Consortium.
The OCG that CH-IV found International began work for and/or on behalf of the PCJ prior to a written contract being executed.

In point of fact, CH-IV International commenced evaluation of the bids prior to 2010 April 8 and provided the PCJ with an updated ‘Review Matrix’ on 2010 February 12. that found The OCG the PCJ Procurement Committee indicated that the report which was received from CH-IV International was, inter alia, inadequate.
of the that found the PCJ The OCG Procurement Committee wrote to the Chairman Evaluation Committee, Dr. Audley Darmand, on 2010 March 26, expressing the said concerns regarding the report which was the Technical Consultants, CH-IV International.

A request was also made for the missing items to be submitted.
submitted by _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 540 of 609 LNG Investigation OCG’s Observation that the NCC The OCG noted requested a copy of the matrix clearly setting out the comparison of the the responsiveness bidders’ evaluation criteria, points allotted and the criteria weighting of all bidders.
to Timeline 2010 April 14 2010 April 14 2010 May 5 2010 May 13 2010 May 31 Occurrence Mr. Godfrey Perkins, Secretary, PCJ Procurement Committee, wrote to Ms. Kathryn Phipps, then Chairman of the PCJ Board of Directors, the indicating Procurement Committee approved the recommendation in accordance the with Technical Consultants, CH-IV International.
report of final that the The then PCJ Board of Directors approved the Bid Evaluation Report to be forwarded to the Accounting Officer in the MEM subject to the corporate profile of the company CLNG being obtained and incorporated.

A presentation was made to the NCC by representatives from the MEM and the PCJ.

The NCC supported the request of the PCJ to enter into negotiations with the ‘preferred bidder’, the Exmar Consortium, relating to the ‘FSRU LNG Project’.
The Cabinet deferred consideration of a Cabinet Submission No.

255/MEM – 16/12 which was entitled “Permission to Negotiate with the preferred bidder for the provision of a Floating Storage Regasification Unit (FSRU) and the Related Infrastructure (LNG) Liquefied Natural Gas further for Project” consultation.

to allow for 2010 June 1 Latham & Watkins, Legal Consultants for the ‘FSRU LNG Project’ was engaged by the PCJ.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 541 of 609 LNG Investigation OCG’s Observation Timeline 2010 June 7 Occurrence By way of Cabinet Decision No.
22/10, Cabinet reviewed the matter that, “The Prime and noted that he had Minister advised discussions with the Ministry of Finance and the Public Service on the matter, but there remained issues to be resolved…” that After consideration, the Cabinet independent an agreed comparative assessment was to be done on the use of a Floating Storage Regasification Unit, and in this regard instructed that: (v) the Ministry of Energy and Mining seek to have the tender validity period extended by the recommended tenderer for a period of two months; (vi) the Ministry of Energy and Mining act expeditiously to services of a obtain consultant through the World Bank an undertake independent assessment; the to (vii) Service the Minister of Finance and the Public have the World discussions with Bank regarding the technical assistance and the financing; and (viii) that the Office of Utilities to Regulation be requested assist with the recommendation of a suitable consultant.” _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 542 of 609 LNG Investigation OCG’s Observation approved Cabinet the The recommendation for the award of contract for the ‘FSRU LNG Project’ to the Exmar Consortium and also for the PCJ to enter into negotiations with the said bidder.
The OCG noted that the finalization of the negotiations was subject to an independent assessment which was supported by the World Bank.

Timeline 2010 June 14 and sub-sea infrastructure) Occurrence Cabinet Decision No.
23/10, indicated, inter alia, the following: (i) “agreed to the selection and announcement…of Exmar Marine as the Preferred Bidder to finance, build, own and operate a Floating Storage Regasification Unit and related infrastructure on-land (jetty, for pipeline delivery of supplies of natural gas… (ii) to granted….permission enter into negotiations with the Preferred Bidder to finance, build, own and operate the Floating Storage Regasification Unit and related infrastructure on such terms and conditions as are to be of approved by the Ministry Finance and the Public Service, the Contracts Commission, the Solicitor General and the Cabinet; (iii) the directed finalization of the negotiations was subject to the completion… of a the technical assessment of the procurement Project and which utilized, procedures assessment was to be done by an independent consultant supported by the World Bank; and (iv) noted that this Decision superseded the instruction by way of Decision No.
22/10 of 7 June, 2010, for the Ministry…to seek to have the tender validity period extended for a period of two months.” National that _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 543 of 609 LNG Investigation Timeline 2010 June 22 2010 July 9 Occurrence OCG’s Observation The OCG, by way of two (2) separate letters which were dated 2010 June 22, and which were addressed to Mr. Nigel Logan, Acting Group Managing Director, PCJ, and Mrs. Hilary Alexander, the MEM Permanent Secretary, issued a written ‘Notice of Enquiry’ concerning the tender and contract award processes for the ‘FSRU LNG Project’.
In the referenced letter, the OCG advised the Acting Group Managing Director of the PCJ, Mr. Nigel Logan, that the OCG took the decision to secure, without delay certain or associated and documents correspondence which will inform its Enquiry.

reservation The OCG took into custody a number of files, both hardcopy and electronic, from the PCJ and the MEM, in regard to the ‘FSRU LNG Project’.

This was undertaken pursuant to Sections 4 (2) (b) and 4 (3) of the Contractor General Act.
A Letter of Notification was sent to the Successful Bidder, by Mr. Nigel Logan, Acting Group Managing Director, PCJ.

The letter was addressed to a Mr. Bart Lavent, Director LNG, Exmar the Marine NV, and ‘preferred the into recommendation the negotiations decisions which were made by the Cabinet.
of to enter to informed bidder’ subject _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 544 of 609 LNG Investigation Timeline 2010 July 15 Occurrence OCG’s Interview with the former Chairman of the PCJ Board of Directors, Ms Kathryn Phipps.
OCG’s Observation The OCG observed that the former Chairman of the Board of Directors had severe concerns in regard to certain activities which were being undertaken between the MEM and certain Public Officers and/or key players in the overall tender process for the ‘FSRU LNG Project’.

2010 July 23 2010 August 23 2010 November 1 2010 November 3 to the the approved for James Robertson The Hon.
a the Cabinet submitted of by way recommendation, Cabinet Submission 382/MEM No.33/10, for the approval of the Negotiation Team.

The Cabinet recommendation Negotiation Team.

The NCC approved the utilization of the Sole Source Procurement for Methodology re- the engagement of the services of Taylor- DeJongh as the financial Consultants for the ‘FSRU LNG Project’.

The Final Assessement Report the which was prepared by independent consultants, Mr. Donald Hertzmark and Mr. Haydn Furlonge.
The consultants were reported as being obtained by the World Bank.
The Report indicated, inter alia, that independent contractors were the engaged “…by the Office of Cabinet at the beginning of October 2010 to review the progress on the proposed the regasification LNG downsteam pipeline and storage Projects and impacts of gas supply on the country’s electricity and industrial sectors.” facility, The OCG noted that several key Findings and Recommendations were made in the referenced Report to the extent that the independent consultants recommended, inter alia, that certain modifications should be undertaken failing which “…the current process be scrapped and that a new round of bidding be instituted with a separate owner-operator for the FSRU who will also undertake the responsibility to purchase gas.” _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 545 of 609 LNG Investigation Timeline Occurrence OCG’s Observation 2010 November 11 The OCG received a letter from Mr. Glenford Watson, Senior Legal Officer, MEM.
The referenced letter requested the OCG’s opinion “…as to whether, as a general principle, it would be permissible for the Government to enter an Implementation/Direct Agreement with the Project Company and the members of the Project Company (Consortium) as co-signees?” into 2010 November 16 OCG’s Letter which was addressed to Mr. Glenford Watson, Senior Legal Officer, MEM.
The referenced OCG Letter stated, inter alia, the following: the OCG’s The MEM submitted recommendation to the Chambers of the Attorney General.

“You have sought the advice of the Office of the Contractor General (OCG) as to whether it would be permissible for the Government to proceed to enter into agreements with Exmar and Promigas , both of which are a part of the Exmar Consortium, the very entity which is at the center of the captioned OCG Enquiry.
Having regard, among other things, to (a) the matters which are outlined in the OCG’s Notice of Enquiry which was dated June 22, 2010, and which was formally conveyed to your Ministry and to the PCJ, and (b) the fact that a major extensive OCG and is currently under Investigation way, highly be it would to for inappropriate render any advice to you other than for you to summarily and subject immediately abort process.” the OCG the _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 546 of 609 LNG Investigation Timeline 2010 December 7 2010 December 7 the Office of Occurrence The opinion from the Chambers of the Attorney General, which was entitled “Letter of November 16, the 2010 from Contractor General in connection with the LNG Project indicated that the OCG “…acted ultra vires to the CG Act in which the advice rendered in the instant case is of no legal effect and is void.” By way of a letter, which was dated 7, Ambassador Douglas Saunders provided the OCG with a copy of a document which was entitled “LNG Report: Assessment Assessment Report Comments”, which was prepared by CH-IV International for the Jamaica LNG Task Force.
Of note, the referenced report was not dated.

December 2010 2010 December 9 to use requested The Cabinet Office the Direct permission Procurement Contracting Methodology contract Mr. to Ernest Megginson as the Project Manager for three (3) months.
OCG’s Observation that the “LNG The OCG noted Assessment Report: Assessment Report Comments” reviewed the independent assessment report, which was prepared by the independent consultants, and its recommendations and was of the opinion that “…the Report was not sufficiently informed.” (a) Sign requested the off The Team that the Cabinet…undertake following actions: the on (“IA”) Implementation Agreement during the week of November 28 and b) Proceed immediately with the LNG supply acquisition plan.”260 (OCG’s Emphasis) 2010 December 9 The approved the NCC the Cabinet recommendation of Office to contract Mr. Ernest Megginson as Project Manager, subject the Cabinet Office utilizing the three (3) month period to conduct a tender process aimed at procuring the services of a full- time Project Manager for the LNG Project.
to 260 Ibid.71 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 547 of 609 LNG Investigation Timeline 2011 April 7 2011 April 11 Occurrence OCG’s Observation The Hon.

Bruce Golding, on 2011 April 7, submitted to the OCG, a copy of two (2) Legal Opinions, which were prepared by Attorneys- at-Law, Livingston, Alexander & Levy, in regard to the procurement procedures for the ‘FSRU LNG Project’.
The Office of the Cabinet, by way of the OCG’s Statutory Requisition, which was dated 2010 April 18, submitted a copy of a Memo that was prepared by the Solicitor General, Mr. Douglas Leys, and which was captioned “Opinion by Livingston Alexander & Levy concerning Tender Process the LNG Project”.
its response for to The OCG notes that both Legal Opinions clearly states, inter alia, that “The tender process…is flawed and could not withstand scrutiny under judicial review.” The OCG found that the Opinion of the Solicitor General was in “…substantial agreement with the views posited by the Attorneys…” the The Solicitor General, which is the Attorney for the GOJ, supported and confirmed and substantive legal issues which were delineated in the Legal Opinions from Livingston, Alexander and Levy, private Attorneys-at-Law.
reasoning _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 548 of 609 LNG Investigation Conclusions Based upon the sworn responses which were received from certain Public Officials/Officers within the MEM, the PCJ, the Cabinet Office and other persons of interest, who were affiliated with, and/or involved in, the LNG Project and/or the recommendation for the selection of the ‘preferred bidder’ for the ‘FSRU LNG Project’, which have been reviewed and cross-referenced, the OCG has arrived at the following considered Conclusions: 1.
The OCG has concluded that since 2001, the GOJ’s energy policy has evolved significantly.

The OCG has found that over the period, 2001 to 2011, the GOJ, has pursued the LNG Project at different stages and having regard to various technical considerations.
In this regard, the OCG has found that, prior to 2008, the GOJ undertook a Front End Engineering Design (FEED) study and engaged in significant research with respect to the suitability of LNG, specifically with regard to the development of a land-based facility.
It is instructive to note that Ms. Marcia Forbes, the then Permanent Secretary, MEM, also indicated, to the OCG, that the GOJ had discussions regarding “… land-based versus off-shore system and the implications, the pros and cons of each concerned me in terms of long-term benefits/threats to Jamaica.” However, during the tenure of the then Minister, Mr. Clive Mulling, coal was the preferred choice as an energy source and the LNG Project was officially halted.
Hence, the LNG project was formally halted until 2009, when the present Prime Minister, the Hon.

Bruce Golding, made an announcement in his Budget Presentation that Jamaica would once again be pursing LNG.

_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 549 of 609 LNG Investigation 2.
The OCG has found and concluded that between the period of 2005 through to 2006, Mustang Engineering undertook a Front End Engineering Desing (FEED) Study, on behalf of the PCJ, in regard to the setting up of a local land-based LNG Project.

3.
3.

Based upon the sworn documentary evidence which has been adduced to the OCG, by representatives of the PCJ and the MEM, the OCG has found, and concluded, that there were no formal pre-assessments and/or studies which were undertaken and/or conducted on behalf of the PCJ and/or the MEM for the ‘FSRU LNG Project’.

4.

The OCG has concluded that both Exmar Marine NV and Merrill Lynch presented proposals to the GOJ with respect to the introduction of LNG in Jamaica.
However, the GOJ did not act upon any of the referenced proposals and, instead, sought to pursue the introduction of LNG, to Jamaica, via the competitive route.

As such, a pre-qualification exercise was undertaken by the PCJ in 2007 April, and, consequently, nine (9) prospective bidders responded to an ‘Invitation to Pre-Qualify’ as LNG providers in 2007 May.

However, this process was not completed.


Subsequently, in 2009 November, following upon the GOJ’s resumed consideration of LNG as a viable fuel source, the Limited Tender Procurement Methodology was utilized, by the PCJ, to invite the nine (9) entities which had previously responded to the request for pre-qualification in 2007.

5.
5.

Based upon the documentary evidence which has been provided to the OCG, the OCG has found and concluded that, over the period of 2001 to 2009, Exmar Marine NV has been actively seeking to introduce LNG in Jamaica.
In point of fact, Exmar Marine NV made unsolicited overtures to the PCJ, in 2007, to develop LNG facilities in Jamaica and held discussions with GOJ officials during the period of time in which there was an ongoing debate regarding the benefits of coal versus LNG and CNG, as alternative energy sources.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 550 of 609 LNG Investigation Exmar Marine NV also informed the OCG that it had its first meeting with the then Minister of Foreign Affairs and Foreign Trade in Brussels, Mr. Anthony Hylton, in 2006 December and, for the first time, was made aware of the potential interest of Jamaica in the FSRU Technology.
Subsequently, in 2007 March, following upon a presentation by Exmar Marine NV, a ‘Mandate’ was signed between the GOJ and Exmar Marine NV.

The referenced ‘Mandate’ authorized Exmar Marine NV to act as an agent for and/or on behalf of the GOJ, to assist it in the purchasing of LNG and/or natural gas.

In the same year, Exmar Marine NV participated in the 2007 Pre-Qualification exercise which was initiated by the PCJ.
However, after the Pre-Qualification process was halted, Exmar Marine NV stated that it continued “…unsolicited meetings in respect of sharing ideas on the feasibility of importing LNG and natural gas use in Jamaica…” Further, the OCG found that Exmar Marine NV held meetings with representatives of the PCJ at the Gastech Conference on 2008 March 10-13, in Bangkok.
Of import, is the fact that the GOJ Representatives who were involved in the referenced Conference included Mr. Ian Moore, the then Chairman of the Board of Directors of the PCJ and current Director of CLNG – the local Jamaica corporate partner in the Exmar Consortium, Mr. Stephen Wedderburn, LNG Project Coordinator, and Mr. Patrick Dallas, Advisor to the then Minister, Mr. Clive Mullings.

6.
6.

The OCG has found, and concluded, that, in 2009 June, Exmar Marine NV held a meeting with the Minister of Energy and Mining, the Hon.
James Robertson, the then Permanent Secretary, Ms. Marcia Forbes, representatives of Promigas, Merril Lynch and EDC LNG, now known as CLNG (Jamaica) Ltd., and that “The goal of the meeting was to advise the Government of the intent to conduct the pre-feasibility studies to determine the economic and technical viability of developing a private _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 551 of 609 LNG Investigation project to import LNG and supply natural gas for use by private bauxite sector entities.”261(OCG Emphasis) The OCG has also concluded, based upon the documentary evidence with which it is seized, that in 2009 July, Exmar Marine NV met with representatives of the MEM and presented “… the approach that would be taken by the group to demonstrate the feasibility of providing LNG to the bauxite sector.”262 7.
The OCG has found and concluded that the company, EDC LNG Limited (which was renamed Caribbean LNG (Jamaica) Limited on 2009 December 8), was incorporated in Jamaica on 2009 June 19.

8.

The OCG has also found and concluded that the Directors and the three (3) majority beneficial shareholders of Caribbean LNG (Jamaica) Limited are as follows: i. Mr. Ian Moore, former Chairman of the PCJ Board of Directors; ii.

Mr. Paul East; and iii.

‘Mr.


Al Kerr’, otherwise known as Mr. Conrad Kerr, former Global Head of LNG, Merrill Lynch.

9.

Based upon the documentary evidence which has been presented to the OCG, the OCG has found and has been led to conclude the following: i. ii.

iii.

That a MOU was signed between CLNG and Promigas on 2009 July 17.

That a MOU was signed between CLNG and Exmar Marine NV on 2009 July 22.
That a MOU between Exmar Marine NV, Promigas S. A., and CLNG was signed on 2010 February 15, the same date as the extended deadline for the submission 261 Response from Exmar Marine NV, which was dated 2010 December 22.

Response #4 262 Response from Exmar Marine NV, which was dated 2010 December 22.
Response #4 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 552 of 609 LNG Investigation of the bids for the ‘FSRU LNG Project’.

The referenced MOU of 2010 February 15, had replaced the two (2) previous MOU’s.

10.

The OCG is of the considered opinion that the company, Caribbean LNG (Jamaica) Limited was formed for the sole purpose of the ‘FSRU LNG Project’.
This is based upon (a) the nature of the company and the date on which it was formed; (b) the fact that approximately one (1) month after the incorporation of the company, two (2) MOU’s were signed between EDC LNG (the then name of the company) and Promigas and Exmar Marine NV, on 2009 July 17 and 22, respectively, (c) the fact that despite being formed in 2009 June, EDC LNG, on its own apparent initiative, was able to successfully undertake and complete a feasibility study, by 2009 October, in regard to the introduction of FSRU LNG technology to Jamaica, and (d) the fact that a qualification requirement of the RFP, which was issued in 2009 November, was that the potential bidder ought to have the ‘use of local expertise’.
11.

The OCG has concluded that the GOJ, through the PCJ, utilized the GOJ Public Sector Procurement Procedures (2008 November), in accordance with the Limited Tender Procurement Methodology, to contract a suitable provider for the ‘FSRU LNG Project’.
In this regard, the NCC, by way of a letter which was dated 2009 November 5, endorsed the proposal of the MEM to utilize the Limited Tender Procurement Methodology to invite the nine (9) entities, which had submitted applications for Pre- Qualification in 2007 May, to re-submit proposals for the ‘FSRU LNG Project’.

12.
12.

The OCG found that the MEM and the PCJ received certain approvals from the PCJ Procurement Committee, the PCJ Board of Directors, the NCC and the Cabinet in respect of the ‘FSRU LNG Project’.

However, the OCG found that the then PCJ Board of Directors expressed several concerns with respect to the manner in which approvals were being requested for the referenced project.
In point of fact, the Minutes of the PCJ Board of Directors which was dated 2009 December 10, indicated that the approval from the Cabinet preceded _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 553 of 609 LNG Investigation the approval from the Procurement Committee “…and the Committee could not interfere with Cabinet’s decision…” Further, the Minutes of the Meeting of the PCJ Board of Directors, which was held on 2009 December 22, indicated, inter alia, that “…the Board took a decision that if an application was received for extension then the Board would consider it…that has not been done and yet there are letters going out indicating that a decision was taken to grant an extension after consultation with the PCJ and with the Ministry.” The foregoing has led the OCG to conclude that there was indeed irregularity with respect to at least one (1) component of the approval process for the ‘FSRU LNG Project’.
In point of fact, the OCG has concluded that the very approval process itself was improper due to the fact that the approval of PCJ Board of Directors was circumvented.

13.
The OCG has concluded that the MEM and the PCJ breached Sub-section S-3100 of the GOJ Public Sector Procurement Procedures (2008 November) which provides, inter alia, that “All adopted sub-criteria should be specified in the RFP… If points allocated to these sub-criteria are not disclosed in the RFP, the Evaluation Committee should allocate them before proposal submission, to reduce the risk of manipulations during the evaluation process…” In this regard, the OCG found that the PCJ and/or the MEM, did not provide the potential bidders with the amended evaluation criteria, as detailed in the ‘Review Matrix’, which was dated 2010 February 12.
It should be noted that the referenced ‘Review Matrix’ was dated three (3) days before the deadline for the submission of bids on 2010 February 15.

14.

The OCG has concluded that the initial oversight structure which was established, within the PCJ, to guide the ‘FSRU LNG Project’, did not promote the principles of good corporate governance.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 554 of 609 LNG Investigation In this regard, the OCG found that at least three (3) of the members of the PCJ Board of Directors served on the LNG Task Force, which is not a part of the approved PCJ Corporate Governance structure, and the LNG Evaluation Committee.
Further, there were instances in which the PCJ Board of Directors raised concerns with respect to the decision-making process for the ‘FSRU LNG Project’.

Further, the OCG has found and concluded that the PCJ was responsible for the implementation of the ‘FSRU LNG Project’.

However, the parent Ministry, the MEM, had direct responsibility with regard to the overall policy guideline for the project.
The OCG has not seen any evidence to suggest that any of the Accounting and/or Accountable Officers within the MEM and/or the PCJ took effective and decisive steps to ensure good corporate governance in the reporting structure which was established to guide the ‘FSRU LNG Project’.

15.
15.

The OCG is of the considered opinion, and has concluded, herein, that Mr. Stephen Wedderburn’s (a) prior involvement and/or affiliation with Exmar Marine NV and Mr. Joseph Fossella, a representative of CH-IV International and (b) current involvement in guiding the Tender process for the ‘FSRU LNG Project’, has compromised the integrity of the entire ‘FSRU LNG Project’.
The OCG’s Conclusion is premised, inter alia, upon the following: i. Mr. Stephen Wedderburn, in 2009, in his then private and personal capacity, had submitted a proposal to the MEM in which he recommended, inter alia, that the formal GOJ procurement procedures be by-passed in order to expedite the LNG project.
The OCG also found another instance in which Mr. Arthur Ransome of CH-IV International indicated that, based upon the recommendation of Mr. Stephen Wedderburn, CH-IV International subcontracted Mr. Joseph Fossella’s company, _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 555 of 609 LNG Investigation Clean Skies, in order to by-pass the stringencies of the GOJ’s procurement process.

ii.
ii.

Mr. Stephen Wedderburn, in several pieces of written correspondence, has consistently identified Exmar Marine NV as a company with which the GOJ should negotiate in regard to the LNG Project.

In point of fact, Mr. Wedderburn, on 2008 May 16, ranked several of the prospective LNG providers and placed Exmar Marine NV as the number one contender.
Such a ranking was undertaken by Mr. Wedderburn prior to an actual tender process and is, without question, indicative of a demonstrated bias towards Exmar Marine NV.

iii.

Questions are also raised with respect to Mr. Stephen Wedderburn’s relationship with Mr. Joseph Fossella who was instrumental in the evaluation of the bids for the ‘FSRU LNG Project’.

Mr. Fossella is a former employee of Black & Veatch and the proprietor of Clean Skies LLC.
Further, the OCG has found, based upon the documentary evidence, that Mr. Wedderburn has taken credit for introducing Exmar Marine NV to Black & Veatch.

Incidentally, the OCG has also found and concluded that Mr. Fossella was a part of the ‘negotiating team’ for and on behalf of Black & Veatch, which led to the formation of an alliance between Exmar Marine NV and Black & Veatch.

iv.
iv.

Prior to the PCJ’s Board of Directors deliberations on 2009 December 22, for the re-engagement of CH-IV International, Mr. Stephen Wedderburn had exchanged several pieces of correspondence with representatives of CH-IV International and Clean Skies and passed information to CH-IV International with respect to the PCJ Board of Directors’ discussion in regard to the requirements for the technical services for the ‘FSRU LNG Project’.
v. Having regard to the foregoing, it is instructive to note that Mr. Stephen Wedderburn disclosed to the PCJ his pecuniary interest in a project in which _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 556 of 609 LNG Investigation Exmar Marine NV was involved.
However, the OCG has found no evidence to suggest that Mr. Stephen Wedderburn disclosed his relationship with Mr. Joseph Fossella, a sub-contractor of CH-IV International, who was actively involved in the Evaluation of the Bids for the ‘FSRU LNG Project’.
Based upon the foregoing, the OCG has concluded that Mr. Stephen Wedderburn’s actions were professionally unethical, tantamount to a flagrant conflict of interest and, in consequence, breached Sub-Section S-1040 of the Revised GOJ Public Sector Procurement Procedures (2008 November).
The OCG’s conclusions and concerns are further compounded by the fact that Mr. Stephen Wedderburn, in his sworn response to the OCG, asserted that “As LNG Project Coordinator I am responsible for overseeing the day-to-day activities of the LNG Project and acting as the focal point for communications in respect of the project.
In respect of procurement activities this includes drafting RFPs and issuing these RFPs once they have been approved, handling bidders’ queries and drafting clarification responses.” The foregoing puts it beyond doubt that, due to Mr. Stephen Wedderburn’s prior associations and demonstrated bias, and the critical role which he has played in the ‘FSRU LNG Project’, the entire integrity of the tender process has been compromised, brought into disrepute and is tainted by a conflict of interest and a gross lack of objectivity which has been evidenced, inter alia, by certain email correspondence which were either written by or sent to Mr. Stephen Wedderburn.
16.

The OCG has concluded that Exmar Marine NV had a distinct advantage over the other potential bidders for the ‘FSRU LNG Project’ as a result of the extensive work which it undertook with respect to introducing LNG to Jamaica since 2006.
In point of fact, prior to the commencement of the tender period in 2009 November, Exmar Marine NV had meetings with EDC LNG (now CLNG) and Promigas (now _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 557 of 609 LNG Investigation members of the Exmar Consortium), in which it was disclosed that they were undertaking a pre-feasibility study to “…determine the economic and technical viability of developing a private project to import LNG and supply natural gas for use by private bauxite sector entities.”263 (OCG Emphasis) It must be reiterated that EDC LNG (now CLNG) is the company which was formed by Mr. Ian Moore, former PCJ Board Chairman, and other interested parties in 2009 June.
Further, and having regard to the fact that Exmar Marine NV was also privy to information which was not made available to the other bidders and was afforded the privilege of having an ongoing working relationship with representatives of the PCJ, in the persons of Mr. Stephen Wedderburn and Mr. Ian Moore, the involvement of Exmar Marine NV in the tender process was highly irregular and unfair to the other bidders which were involved in the process.
Consequently, the foregoing initiative would have given the Exmar Consortium a distinct, and hence, irregular, improper and unfair advantage in the tender process.

17.
The OCG has concluded that the overall tender process for the ‘FSRU LNG Project’ has been compromised having regard, inter alia, to the following: i. Mr. Ian Moore, during his tenure as the PCJ Board Chairman, was, at a minimum, (a) privy to information with respect to the possibilities of introducing LNG to Jamaica; (b) privy to discussions which Mr. Stephen Wedderburn had with Mr. Bart Lavent of Exmar Marine NV; (c) found to have requested information from Mr. Stephen Wedderburn regarding, inter alia, the feasibility of LNG to Jamaica; and (d) attended several meetings and had numerous discussions with potential bidders.
263 Response from Exmar Marine NV, which was dated 2010 December 22.

Response #4 _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 558 of 609 LNG Investigation ii.

Subsequently, after Mr. Ian Moore’s tenure ended as the Chairman of the PCJ Board of Directors in 2008 November, he established the company, EDC LNG (now CLNG), approximately seven (7) months after.
EDC LNG (now CLNG) subsequently formed a business partnership with the said Exmar Marine NV, which was found to have been lobbying for the introduction of LNG to Jamaica from 2006.
The CEO of EDC LNG (now CLNG), Mr. Conrad Kerr, happens to be the former Global Head of LNG for Merrill Lynch, a company that (a) proposed to joint venture with the GOJ for the introduction of LNG to Jamaica, albeit being rejected; and (b) had had several meetings and discussions with Mr. Bart Lavent of Exmar Marine NV, in respect of which both Mr. Stephen Wedderburn and Mr. Moore were informed.

iii.
iii.

Mr. Stephen Wedderburn was also found to have played a key role in establishing (a) the alliance between Exmar Marine NV and Black & Veatch and (b) the sub- contract between Mr. Joseph Fossella’s company, Clean Skies LLC, and CH-IV International.

Of note, is the fact that Mr. Joseph Fossella was the former Vice President, Business Development for Black & Veatch and had also worked with the company, as a Consultant, up to April 18, 2009.
The OCG has also found that Mr. Fossella played an integral role in the evaluation of the bids for the ‘FSRU LNG Project’.

Mr. Fossella was further found to have “…started the LNG Liquefaction Alliance Project between Black & Veatch, Excelerate and Exmar, and worked on the project for six or seven months up to his retirement.” iv.
Mr. Stephen Wedderburn was also found to have played a key role in establishing (a) the alliance between Exmar Marine NV and Black & Veatch and (b) the sub- contract between Mr. Joseph Fossella’s company, Clean Skies LLC, and CH-IV International.
Mr. Fossella was further found to have “…started the LNG Liquefaction Alliance Project between Black & Veatch, Excelerate and Exmar, and worked on the project for six or seven months up to his retirement.” _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 559 of 609 LNG Investigation v. Exmar Marine NV, having been identified as trying to introduce LNG to Jamaica since 2006, was found to have been considerably more favoured over the other bidders.
Further, the Exmar Consortium was found to have been at an advantage with respect to the preparation of a proposal, as Exmar Marine NV’s previous proposal was used as a benchmark for the ‘FSRU LNG Project’.

The OCG’s conclusion is buttressed by the fact that the Exmar Consortium was the only bidder that did not request an extension of the submission deadline.

18.
18.

The OCG has concluded that there are several questions which have been raised with respect to the Exmar Consortium’s capabilities to fulfill the requirements for the ‘FSRU LNG Project’, specifically with respect to its abilities to (a) design and build any fixed infrastructure facilities; and (b) to commercially operate the vessels.

The OCG’s foregoing conclusion is premised upon the fact that Exmar Marine NV has substantially partnered with Excelerate Energy LP on projects of a similar nature.
In this regard, Mr. Shaun Davison of Excelerate Energy LP, asserted that Exmar Marine NV (a) operated the vessels, on behalf of Excelerate Energy LP, by providing physical crew; (b) did not design or build any fixed infrastructure facility; (c) does not control operationally or commercially the vessels; and (d) does not have the technology patents.
Further, the OCG found that CH-IV International evaluated the strength of the Exmar Consortium with respect to the partnership between Exmar Marine NV and Excelerate Energy LP.

However, of import is the fact that Excelerate Energy LP is not a part of the Exmar Consortium.
Also, and quite importantly, is the fact that CH-IV International, in assessing the specific experience and capabilities of the Exmar Consortium, in relation to the assignment, did not undertake an independent assessment of Exmar Marine NV’s capabilities outside of its partnership with Excelerate Energy LP.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 560 of 609 LNG Investigation Therefore, the OCG is unable to state definitively whether Exmar Marine NV, on its own, is capable of performing the required tasks for the ‘FSRU LNG Project’, given that a substantial portion of its experience has been in partnership with Excelerate Energy LP.

19.
19.

The OCG has concluded that the evaluation process, which led to the recommendation to award the contract to the Exmar Consortium, was flawed.

This is premised, inter alia, upon the following: i.

The Technical Consultants, CH-IV International, in assessing the proposal from the Exmar Consortium, utilized information which was not presented in the Consortium’s bid.
In this regard, CH-IV indicated in its report that “…information obtained from their websites demonstrate clearly the nature of the joint venture between Exmar and Excelerate in terms of development, construction, management and operation of the LNGRV fleet.” ii.

The Technical Consultants, CH-IV International, evaluated the strength of the Exmar Consortium with respect to the partnership between Exmar Marine NV and Excelerate Energy LP.

However, Excelerate Energy LP is not a part of the Exmar Consortium.
iii.

The Technical Consultants, CH-IV International, in assessing the specific experience and capabilities of the Exmar Consortium, in relation to the assignment, did not undertake an independent assessment of the Exmar Marine NV’s capabilities outside of its partnership with Excelerate Energy LP.

Consequently, the OCG is unable to substantiate the recommendation which was made to award the contract to the Exmar Consortium based upon the flaws which have been identified above.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 561 of 609 LNG Investigation 20.

Notwithstanding the initiative of Exmar Marine NV, during 2008, there was significant sharing of information between Exmar Marine NV, Mr. Stephen Wedderburn, Mr. Conrad Kerr and Mr. Ian Moore with respect to Exmar Marine NV’s lobbying for the introduction of LNG in Jamaica.
During the tenure of Mr. Ian Moore as the Chair of the PCJ Board of Directors (2007 December to 2008 November), the LNG Project was purportedly inactive.

However, the documentary evidence which has been provided to the OCG suggests that Mr. Ian Moore and Mr. Stephen spearheaded an initiative to steer the GOJ’s energy policy away from coal to LNG.
Consequently, the OCG found that a relationship between Mr. Bart Lavent of Exmar Marine NV, Mr. Stephen Wedderburn, Mr. Conrad Kerr and Mr. Ian Moore developed, wherein the named parties collaborated in an effort to promote LNG.
Having regard to the foregoing, the OCG is of the considered opinion that Mr. Stephen Wedderburn’s involvement in the LNG project (a) created a conflict of interest situation specifically with respect to the roles and responsibilities which were assigned to him during the tender process and (b) raised questions of impropriety and irregularity.
The OCG’s conclusion is also premised upon the following: i. Mr. Wedderburn was instrumental in developing the RFP which was issued to the prospective bidders on 2009 November 12 and 13.

It should be noted that the RFP was drafted in the absence of a comprehensive project plan for the ‘FSRU LNG Project’.
In this regard, Mr. Wedderburn, in the Meeting of the PCJ Board of Directors, which was held on 2009 December 10, indicated that “…the team did not really have a master plan, so it is looking for the proposals to come and then dissect from there adding that he was waiting on the proposals to guide him in terms of plans for the project…” _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 562 of 609 LNG Investigation ii.
Further, the RFP which was prepared by Mr. Stephen Wedderburn, and the LNG Task Force, amongst others, was alleged to have been rushed for same to be issued by 2009 November.
In this regard, it was reported by Mr. Nigel Logan, the Acting Group Managing Director, PCJ, that the RFP “…was sent to the members of the Procurement Committee by email…for the Committee to approve, for it to be sent out that same day by midnight… the Procurement Committee of course would not have been able to meet at such short notice and essentially did not have a chance to read over the RFP, before it went out…” Having regard to the foregoing, the OCG found that the RFP was not duly approved by the PCJ Procurement Committee prior to it being issued.
iii.

It was reported that Mr. Stephen Wedderburn, who was not supposed to have been involved in the process for the evaluation of the bids, was present at several of the meetings of the LNG Technical Evaluation Committee in which the Chairman, Dr. Audley Darmand, indicated that Mr. Wedderburn’s presence was necessary as he was required to develop the ‘instrument of measure’.
Of note, Mr. Stephen Wedderburn was fully aware that his involvement in the evaluation process would have been unethical as he stated in an email to Dr. Ruth Potopsingh, which was dated 2009 September 6, prior to his official re- engagement at the PCJ, inter alia, that “… it has already been decided that I would not be involved in the evaluation of any LNG FSRU proposals for Jamaica.

I therefore hope that people are not creating a red herring out of this matter.
I also note that my involvement in the Colombia project was widely known by officials of the Ministry, PCJ and JBI long before I was approached to assist with the Jamaican project…” _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 563 of 609 LNG Investigation iv.
By way of an email which was dated 2008 January 23, Mr. Stephen Wedderburn also informed Mr. Ian Moore and Mr. Conrad Kerr, amongst others, that “…PCJ wants the Exmar proposal to be treated as the base case for the implementation of the LNG project in Jamaica…” 21.

The OCG has concluded that Merrill Lynch had approached the GOJ in 2007 proposing a willingness to be a joint venture partner in developing the LNG project.

However, the proposal was rejected by the GOJ.


The OCG further found that representatives from Merrill Lynch, namely, Mr. Conrad Kerr, then Global Head of LNG, Mr. Stephen Hanan and Mr. Andrew Gray (Chief Operating Officer – Latin America & the Caribbean), communicated with Mr. Stephen Wedderburn, during the period.
There were several pieces of email correspondence which were identified, by the OCG, which indicated that Merrill Lynch had discussions and meetings with Mr. Bart Lavent, Director - LNG, Exmar Marine NV, with respect to the LNG Project in Jamaica.
In at least one instance, the OCG found that information was being shared on the “…existing and potential future LNG demand at the various prospective end-users in Jamaica”, between Mr. Stephen Wedderburn, Mr. Conrad Kerr, and Mr. Bart Lavent, amongst the other referenced representatives of Merrill Lynch.
Having regard to the foregoing, the OCG found that information was being shared between both Mr. Conrad Kerr and Mr. Ian Moore, who are now Directors and Shareholders of CLNG, a partner company of the Exmar Consortium, and Mr. Stephen Wedderburn, within the period of 2007 to 2008.

Further, the said information was being shared with Mr. Bart Lavent of Exmar Marine NV.
The OCG is of the considered opinion that the apparent working relationship which existed between the named individuals, which involved the sharing of information regarding LNG, and the subsequent establishment of a corporate entity, CLNG, in _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 564 of 609 LNG Investigation 2009, by Mr. Conrad Kerr and Mr. Ian Moore, which is a principal member of the consortium which submitted a bid for the ‘FSRU LNG Project’, has compromised the entire LNG Project.
It is abundantly clear from the documentary evidence that both Mr. Ian Moore and Mr. Conrad Kerr, who have now partnered with the preferred bidder, the Exmar Consortium, via the formation of CLNG, were, in their then respective substantive capacities, involved in some form of information trading with a representative of Exmar Marine NV, a company which has been lobbying for the introduction of LNG to Jamaica from as early as 2006.
The OCG is of the considered opinion that the collective fact circumstances surrounding the events, meetings, networking, and subsequent business ventures which have developed between the named individuals, rises above mere coincidence and closely resembles that of a contrived and collusive collaborative effort which was driven by their knowledge of Jamaica’s prospective requirements for LNG based upon information which was previously garnered by the named persons in their then respective employment capacities.
22.
The OCG identified an email from Mr. Stephen Wedderburn, which was dated 2008 January 23, that was addressed to Mr. Stephen Hanan of Merrill Lynch, and which was copied to Mr. Ian Moore and other representatives from Merrill Lynch, in which Mr. Wedderburn stated, inter alia, that “…PCJ wants the Exmar proposal to be treated as the base case for the implementation of the LNG Project in Jamaica and the proposal being developed for the Prime Minister should reflect this…” The foregoing statement made by Mr. Stephen Wedderburn suggests that the ‘implementation’ of the LNG Project to Jamaica was tailored in accordance with a proposal of Exmar Marine NV.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 565 of 609 LNG Investigation The OCG further found, by way of an email which was dated 2008 January 9, from Mr. Stephen Wedderburn to Mr. Ian Moore and Mr. Conrad Kerr, amongst other, that the Exmar Marine NV had given a presentation on “…an adjusted proposal from Exmar…” which was attached to the referenced email.
Having regard to the foregoing, the OCG is of the view that once the referenced proposal was used as a base-case for the implementation of the LNG Project, by whatever means, the entire ‘FSRU LNG Project’ would have been compromised and skewed in favour of Exmar Marine NV and, consequently irregular, improper and unfair to the other bidders.

23.
23.

The OCG has concluded that the Accounting and Accountable Officers within the MEM and the PCJ, whilst having knowledge of Mr. Wedderburn’s prior affiliation with Exmar Marine NV, allowed Mr. Stephen Wedderburn to (a) participate in the process which preceded the evaluation of the bids, (b) serve on the decision-making Committees/Task Forces for the ‘FSRU LNG Project’ and (c) communicate with the potential bidders during the tender process with respect to the ‘FSRU LNG Project’.
The OCG has, therefore, concluded that the Accounting and Accountable Officers of the MEM and the PCJ were complicit in their duties as it regards mitigating and/or preventing the conflict of interest situation in which Mr. Stephen Wedderburn has become embroiled.

24.

The OCG has concluded that the re-engagement of CH-IV International was highly irregular, improper and breached the GOJ Public Sector Procurement Procedures.
This is premised upon the fact that (a) the NGC of Trinidad and Tobago was also a party to the 2005 contract with the PCJ and CH-IV International; and (b) the scope of work which was required by the technical consultant for the ‘FSRU LNG Project’ was different from the scope of work which was detailed in the 2005 contract.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 566 of 609 LNG Investigation Consequently, the new contract which was signed with CH-IV International, in 2010 April, included the development and utilization of a ‘Review Matrix’ which effectively increased the consultant’s scope of works.
Having regard to the changes to the parties in the contract and the increased scope of works, the OCG is of the considered opinion that the PCJ should have initiated a new tender process for the Technical Advisors.

However, having failed to undertake this new tender process, the PCJ should have, at a minimum, sought the approval of the NCC and the Cabinet with respect to the variation of the contract pursuant to Sub- section S-2040 of the GOJ Public Sector Procurement Procedures.

25.
25.

The OCG has, therefore, concluded that the re-engagement of the Technical Consultants, CH-IV International, was done in contravention of Section S-2040 of the GOJ Public Sector Procurement Procedures (2008, November).

26.

The OCG has concluded that Mr. Ian Moore, on one of his official trips in March 2008, held discussions with Exmar Marine NV with respect to the introduction of LNG in Jamaica.
The OCG, having considered the information which was provided to it, herein concludes that a relationship seems to have been fostered between representatives of Exmar Marine NV, Mr. Stephen Wedderburn and Mr. Ian Moore during the period 2007 December to 2008 November, wherein, all the named parties were working together and sharing ideas on the feasibility of LNG and natural gas in Jamaica.
This relationship is demonstrated by the numerous email correspondence which continued to be exchanged up to the time at which Mr. Ian Moore demitted office from the PCJ, in 2008 November, as the company’s chair.

27.
27.

With respect to the role, involvement and/or affiliation of the former Chairman of the PCJ Board of Directors, Mr. Ian Moore, in the overall LNG project, the OCG has made the following determinations: _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 567 of 609 LNG Investigation i.
During Mr. Ian Moore’s tenure he actively sought to promote LNG and was in communication with Mr. Stephen Wedderburn and Mr. Bart Lavent of Exmar Marine NV.

ii.

Mr. Ian Moore’s active lobbying for LNG involved the attendance of several meetings with LNG stakeholders such as Golar LNG, Merrill Lynch and Exmar Marine NV.

iii.
iii.

Mr. Ian Moore’s active lobbying for LNG occurred at a time when the LNG project was officially halted as the then Minister, Mr. Clive Mullings, was pursuing coal as the preferred fuel choice for Jamaica.

iv.

Mr. Ian Moore, as the then Chairman of the PCJ Board of Directors, working in conjunction with Mr. Stephen Wedderburn, was sufficiently provided with a wealth of information regarding LNG and the prospects for LNG in Jamaica.
v. During Mr. Ian Moore’s tenure, Exmar Marine NV continued its courting of the GOJ with respect to the introduction of LNG in Jamaica.
Consequently, the OCG has concluded that Mr. Ian Moore, during his tenure at the PCJ (2007 December to 2008 November), (a) worked with Mr. Stephen Wedderburn to promote LNG in Jamaica; (b) gained a wealth of knowledge on LNG and was exposed and/or had access to the propriety information which the GOJ had in its custody with respect to LNG; (c) came into contact with representatives of Exmar Marine NV and Mr. Conrad Kerr, formerly of Merrill Lynch; and (d) participated in at least one (1) GOJ funded trip in which he held discussions with representatives of Exmar Marine NV with respect to introducing LNG in Jamaica.
28.
Having regard to (a) Mr. Moore’s lobbying for LNG during his tenure as Chairman of the PCJ Board of Director, and (b) the apparent mutual working relationship between Mr. Bart Lavent of Exmar Marine NV, Mr. Stephen Wedderburn and Mr. Ian Moore, _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 568 of 609 LNG Investigation several questions of impropriety and irregularity with respect to bidding process are raised.
This is premised, inter alia, upon the following: i.

Approximately seven (7) months after demitting office at the PCJ in 2008 November, Mr. Ian Moore became the Majority Beneficial Shareholder of EDC LNG (now CLNG) on 2009 June 19. ii.

The OCG found that the company Caribbean LNG (B.V.I.)

Limited, the primary Shareholder of CLNG (Jamaica) Limited, was incorporated on 2009 December 22, approximately one (1) month after the issuance of the RFP for the ‘FSRU LNG Project’.

iii.
iii.

The sole Shareholders of the company, Caribbean LNG (B.V.I.)

Limited, are Mr. Ian Moore and Mr. Paul East.

iv.

CLNG and Promigas, another party to the Exmar Consortium, signed a MOU on 2009 July 17. v. CLNG and Exmar Marine NV signed a MOU on 2009 July 22. vi.

Exmar Marine NV, Promigas and CLNG, signed a MOU replacing all other MOUs on 2010 February 15, the same day which was the deadline for the submission of the bids for the ‘FSRU LNG Project’.

vii.
vii.

In 2009 June, Exmar Marine NV indicated that a meeting was held with Mr. James Robertson and the then Permanent Secretary, Ms. Marcia Forbes and EDC LNG (now CLNG) to advise the GOJ of its intent to conduct a pre-feasibility study to determine the economic and technical viability of a private project to import LNG and supply natural gas.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 569 of 609 LNG Investigation It is instructive to note that Mr. Ian Moore, in his response to the OCG’s Requisition of 2010 December 3, indicated that EDC LNG (now CLNG) engaged an engineering firm called Bechtel Oil and Gas in 2009 July to conduct the pre- feasibility study.

viii.
viii.

EDC LNG (now CLNG) completed a pre-feasibility study in 2009 October on its own volition which was one (1) month prior to the issuance of the RFP in 2009 November.

ix.

Coincidentally, Exmar Marine NV was the only company which did not request an extension of time for submitting its bid.

x.
x.

By way of an email which was dated 2008 January 23, Mr. Stephen Wedderburn informed Mr. Ian Moore and Mr. Conrad Kerr, amongst others, that “…PCJ wants the Exmar proposal to be treated as the base case for the implementation of the LNG project in Jamaica…” xi.
Mr. Stephen Wedderburn, in a meeting at the PCJ Board of Directors, which was held 2009 December 10, indicated that the Team did not have a master plan for the project and, as such, was looking for the proposals which would be received in response to the RFP to guide the plan for the project.

xii.
xii.

Mr. Conrad Kerr, a director and shareholder of CLNG, who was also in communication with Mr. Ian Moore, during his tenure as Chairman of the PCJ Board of Directors, and Mr. Bart Lavent of Exmar Marine NV, was an executive employee of Merrill Lynch at the time that Merrill Lynch had submitted a proposal to the GOJ with respect to LNG, albeit that Merrill Lynch’s proposal was rejected by the PCJ.

29.
29.

Mr. Ian Moore, in his capacity as a Director and Majority Beneficial Shareholder of CLNG, indicated in his sworn response to OCG’ Statutory Requisition, which was _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 570 of 609 LNG Investigation dated 2010 December 3, that “There was no approved and/or active LNG Project during my tenure at the PCJ.
The entire period of my tenure was consumed by an ongoing debate between the merits of coal and LNG as an energy source.” Mr. Moore further indicated to the OCG that “The PCJ Board of Directors, as a whole, received recommendations from the Petroleum Corporation of Jamaica (PCJ) Procurement Committee for review and endorsement by the Board, as appropriate, and on-ward recommendation to the Ministry of Mining and Energy (MEM) PC.” Upon a review of the Minutes of the PCJ Board of Directors, during Mr. Ian Moore’s tenure, the OCG found that the LNG Project was only mentioned in the formal Minutes of the PCJ’s Board of Directors on two (2) occasions.
However, and despite the sworn assertions of Mr. Ian Moore, the OCG has seen evidence of several pieces of email correspondence, in 2008, which revealed that Mr. Ian Moore, during his tenure, was in frequent communication and attended several meetings, with Mr. Stephen Wedderburn, then Group Technical Director, PCJ, Mr. Conrad Kerr, then Global Head of LNG, and other representatives of Merrill Lynch, Mr. Bart Lavent of Exmar Marine NV, and other individuals, with respect to lobbying for LNG in Jamaica.
In at least one instance, Mr. Stephen Wedderburn was identified as requesting information, for and on behalf of Mr. Ian Moore, regarding the “Floating Energy Solution concept” and, amongst other things, enquiring how long it would take for same to be delivered.
The OCG also found evidence to indicate that Mr. Stephen Wedderburn advised and updated Mr. Ian Moore in regard to developments and issues which concerned LNG, and in particular, provided Mr. Ian Moore with information which was continuously being shared between Mr. Bart Lavent of Exmar Marine NV and himself (Mr. Stephen Wedderburn).
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 571 of 609 LNG Investigation In addition, the OCG was also provided with information from Mr. Nigel Logan, Acting Group Managing Director, PCJ, which indicated that the PCJ incurred expenses in the sum of $24,430,345.82 and $1,829,198.42 in the years 2007 and 2008, respectively, in regard to the LNG Project.
Irrespective of Mr. Ian Moore’s statement that “There was no approved and/or active LNG Project during my tenure at the PCJ”, the fact circumstances and documentation which have been provided to the OCG sharply contradict such an assertion.
It is the OCG’s considered opinion that (a) since email correspondence was being exchanged between Mr. Ian Moore, Mr. Stephen Wedderburn and Mr. Bart Lavent of Exmar Marine NV, regarding the feasibility of LNG in Jamaica, (b) the PCJ was expending money during the tenure of Mr. Ian Moore, and (c) since Mr. Ian Moore was in fact copied on certain emails, he would have been privy to ongoing considerations and discussions.
In this regard, Mr. Moore’s assertions raise serious questions regarding the credibility of such a response and whether the LNG was in fact inactive as has been suggested.

30.

For the period of 2003 to 2010, the PCJ expended a total of $251,408,280.88 with respect to the LNG Project.

It is instructive to note that of this amount, an aggregated value of $16,345,677.61 was expended on ‘Travel Expenses (Foreign)’ and $212,353,624.67 was spent on ‘Consultancy Fees (Foreign)’.
Further, of the $212,353,624.67 which was expended on ‘Consultancy Fees (Foreign)’ Mustang Engineering was paid $96,608,451.25 between the period of 2005 to 2007.

It is instructive to note that the FEED Study which was undertaken by Mustang Engineering was for a ‘land-based facility’ and not the ‘FSRU LNG Project’.
Pursuant to the 2010 April 8 contract between PCJ and CH-IV International, Mr. Nigel Logan, Acting Group Managing Director, PCJ, in his response to the OCG’s Statutory _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 572 of 609 LNG Investigation Requisition, which was dated 2011 February 15, indicated, inter alia, that the contract “… is for US$387,000 of which US$425,923.02 has been paid.” 31.
Given the fact that during Mr. Ian Moore’s tenure the official GOJ Energy Policy was geared towards coal, and Mr. Ian Moore’s sworn assertion that“There was no approved and/or active LNG Project during my tenure at the PCJ”, the OCG is unable to determine (a) on whose behalf Mr. Stephen Wedderburn and Mr. Ian Moore were working in all instances; and (b) under whose Authority both gentlemen were sharing information and/or correspondence with, inter alia, Mr. Conrad Kerr and Mr. Bart Lavent of Exmar Marine NV.
Consequently, the OCG is unable to determine under whose authority and for whose benefit Mr. Stephen Wedderburn and Mr. Ian Moore were acting given (a) that several of the referenced correspondence were not shared with any other Accounting and/or Accountable Officers of the PCJ and/or the MEM, (b) the curious and seeming conspiratory circumstances surrounding the Exmar Consortium’s exposure to information, (c) the timing and formation of CLNG and (d) the fact that CLNG, in conjunction with Exmar Marine NV, were sufficiently poised to have completed a feasibility study one month prior to the issuance of the RFP by the PCJ.
However, the OCG found at least one (1) instance in which both Mr. Ian Moore and Mr. Stephen Wedderburn, while on an official GOJ trip, met with representatives of Exmar Marine NV and shared information with respect to the promotion of LNG.

32.

Having regard to any questions in respect of (a) insider information trading; (b) bid rigging and/or (c) corruption, the OCG has made, inter alia, the following determinations: i.
As previously highlighted, Exmar Marine NV was placed at a distinct advantage based upon (a) its 2007 Mandate with the GOJ; (b) the prior sharing of information with Mr. Stephen Wedderburn and Mr. Ian Moore between 2007 and _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 573 of 609 LNG Investigation 2008; (c) work which was undertaken in 2007; and (d) the pre-feasibility study which was undertaken in 2009 October.
ii.

During Mr. Ian Moore’s tenure (2007 December – 2008 November) there were several pieces of email correspondence between Mr. Bart Lavent of Exmar Marine NV, Mr. Stephen Wedderburn, Mr. Ian Moore, and Mr. Conrad Kerr then of Merrill Lynch.

In the referenced correspondence, all parties were privy to information on LNG and it appears that they were collectively working to introduce LNG in Jamaica.

iii.

iv.
iii.

iv.

Two (2) of the parties who were privy to the above referenced correspondence, namely, Mr. Ian Moore and Mr. Conrad Kerr, subsequently formed a company, EDC LNG (now CLNG) in 2009 June.

The referenced company was formed approximately seven (7) months after Mr. Ian Moore demitted office.

v. Mr. Ian Moore, as the then Chairman of the PCJ Board of Directors would have been privy to all the information with respect to LNG which was in the possession of the PCJ.

vi.
Mr. Stephen Wedderburn, who was in prior communication with Exmar Marine NV and who, by all accounts, had a working relationship of some sort with Exmar Marine NV (a) was a key person responsible for the drafting of the RFP; (b) in communication with the bidders throughout the tender period; (c) was assisting the Evaluation Committee to develop the ‘instrument of measure’; (d) had communicated on more than one occasion that Exmar Marine NV was his number one ranked company in the FSRU industry; and (e) had on several occasions recommended that the formal procurement process be undermined and/or bypassed in the name of expediency.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 574 of 609 LNG Investigation Based upon the foregoing determinations, the OCG is of the considered view that the referenced matter is one which presents adequate evidence which would demand that further investigations and consultations be undertaken by the State’s law enforcement and criminal prosecutorial agencies with the objective of determining whether Mr. Ian Moore, Mr. Stephen Wedderburn and/or Mr. Conrad Kerr, and/or any other Public Official/Officer or person, conspired or attempted to use insider information and/or proprietary information to enure a benefit to themselves and/or to any person or entity with which they were/are associated and/or in which they had or may have a pecuniary interest.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 575 of 609 LNG Investigation Referrals The OCG, in the conduct of its Investigation, is required to be guided by Section 21 of the Contractor-General Act.
Section 21 of the Contractor-General Act provides as follows: “If a Contractor-General finds, during the course of his Investigations or on the conclusion thereof that there is evidence of a breach of duty or misconduct or criminal offence on the part of an officer or member of a public body, he shall refer the matter to the person or persons competent to take such disciplinary or other proceeding as may be appropriate against that officer or member and in all such cases shall lay a special report before Parliament.” (OCG’s Emphasis) 1.
Pursuant to the mandatory statutory obligations which are imposed upon a Contractor General by Section 21 of the Contractor General Act, the OCG is hereby formally referring a copy of this Report to the Learned Director of Public Prosecutions, the Auditor General and the Financial Secretary in the MOFPS, for them to determine and to advise what steps may be taken to hold to account the Accounting and/or the Accountable Officers within the MEM and the PCJ, with respect to certain irregularities and improprieties, in the planning, conceptualization and implementation of the ‘FSRU LNG Project’, which were identified by the OCG during the course of its Investigation.
This Referral is being made having regard to the identified breaches of the Revised GOJ Public Sector Procurement Procedures Handbook (2008 November) and, in consequence, the breaches of the attendant Public Sector Regulations which were promulgated in 2008 December, which resulted from the referenced irregularities and improprieties.
The Referral is being made on the basis that there is sufficient prima facie evidence which is contained herein and, more particularly and importantly, in the sworn statements that were furnished to the OCG by the relevant Respondents, to suggest, inter alia: _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 576 of 609 LNG Investigation a.
That the entire tender process for the ‘FSRU LNG Project’ has been compromised, brought into disrepute and tainted by a conflict of interest and a gross lack of objectivity and impartiality due to (i) Mr. Stephen Wedderburn’s prior associations with certain named contractors, (ii) Mr. Wedderburn’s demonstrated bias towards Exmar Marine NV, and (iii) the critical role which was played by Mr. Wedderburn in the ‘FSRU LNG Project’, as has been evidenced by, inter alia, certain email correspondence which was either written by and/or sent to Mr. Stephen Wedderburn.
Having regard to the foregoing, the OCG is also of the considered opinion that Mr. Stephen Wedderburn’s actions were professionally unethical and constituted a conflict of interest and, in consequence, constituted a breach of Sub-Section S-1040 of the Revised GOJ Public Sector Procurement Procedures (2008 November).
Sub-Section S-1040 of the Revised GOJ Public Sector Procurement Procedures (2008 November) provides, inter alia, as follows: “CONFLICT OF INTEREST All personnel involved in handling a procurement process are expected to observe the GOJ Code of Conduct for Civil Servants outlined in the Staff Orders and to be free of interests or relationships that are actually or potentially detrimental to the best interests of GOJ and shall not engage or participate in any transaction involving a company, its affiliates, divisions or subsidiaries in which they have even minor interests.
Any GOJ personnel involved in a procurement process that has assumed, or is about to assume, a financial or other outside business relationship that might involve a conflict of interest, must immediately inform their supervisors in writing of the circumstances involved.
This information is to be reviewed at an appropriate level for a decision whether a conflict of interest is present, and if so, what course of action will be taken.” _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 577 of 609 LNG Investigation b.
That the re-engagement of the Technical Advisors, CH-IV International, in 2010 April, was undertaken, without the stipulated approvals, in contravention of Sub- section S-2040 of the Revised GOJ Public Sector Procurement Procedures Handbook (2008 November) and, in consequence, in contravention of the attendant Public Sector Regulations which were promulgated in 2008 December.
Sub-Section S-2040 of the Revised GOJ Public Sector Procurement Procedures (2008 November) provides, inter alia, as follows: “EXPENDITURE AUTHORITIES The expenditure authorities required before a Procuring Entity may enter into a contract are currently as follows: Threshold Authority J$10,000,000 and below The Accounting Officer/Head of Entity shall approve subject to procedures included herein.
Above J$10,000,000 – The Accounting Officer/Head of Entity shall J$30,000,000 endorse on the recommendation of the NCC.

Above J$30,000,000 Cabinet, on the recommendation of the NCC and the Accounting Officer/Head of Entity shall approve.

The threshold values above relate to gross amount payable to contractors.
These figures will be revised from time to time as approved by Cabinet.” c. That in respect of a document which was entitled “Framework for Review and Evaluation of Proposals”, which was dated 2010 February 12 and the subsequent use of a “Review Matrix” to evaluate the proposals which were received for the ‘FSRU _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 578 of 609 LNG Investigation LNG Project’, the OCG was not provided with, nor has it seen, any evidence to suggest that the referenced ‘Review Matrix’, which was designed by the Consultants, CH-IV International, for and on behalf of the PCJ, was issued to the potential bidders, via an Addendum or otherwise, prior to the submission deadline.
The non-disclosure of same, to the bidders, is in contravention of Sub-Section No.
S- 3100 of the GOJ Public Sector Procurement Procedures (2008 November), which provides that: “All adopted sub-criteria should be specified in the RFP… If points allocated to these sub-criteria are not disclosed in the RFP, the Evaluation Committee should allocate them before proposal submission, to reduce the risk of manipulations during the evaluation process…” Consequently, the OCG found the foregoing to be irregular and in breach of the GOJ’s Public Sector Procurement Guidelines and Regulations.
d. That the OCG has found no evidence to suggest that Mr. Stephen Wedderburn disclosed his relationship with Mr. Joseph Fossella, a sub-contractor of CH-IV International, who was actively involved in the Evaluation of the Bids for the ‘FSRU LNG Project’.
It is important to note that Section 36 (1) of the Public Sector Procurement Regulations (2008 December) imposes a duty upon “…any public officer directly or indirectly involved with the procurement process and particularly in the preparation of bidding documents, evaluation, contract negotiations and contract management and payments to-(a) declare to the head of his entity or chairman of the entity's procurement committee any potential conflict of interest in relation to a proposed Government contract;(b) declare to the head or chairman, any relationship with a bidder, supplier, contractor or consultant and refrain from taking part in either the decision making process or the implementation of any prospective Government contract where such a relationship exists.
(OCG Emphasis) _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 579 of 609 LNG Investigation The OCG, is of the considered opinion, that it is within the purview of the Director of Public Prosecutions, the Auditor General and the Financial Secretary, in the Ministry of Finance and the Public Service (MOFPS), to determine and to advise what appropriate and/or applicable actions may be taken or initiated against the representatives of the MEM and the PCJ, having regard to all of the circumstances of the case.
In the foregoing regard, it is of critical import to note the following sections of the Public Sector Procurement Regulations: 39.

A person who-(a) contravenes any provision of these Regulations;(b) aids, abets, counsels or procures the contravention of any such provision;(c) is knowingly involved in or is a party to any such contravention;(d) conspires with any other person to contravene any such provision, is liable in damages for any loss caused to any other person by such conduct.

Civil liability.
Civil liability.

40.

A person who-(a) contravenes these Regulations; or (b) aids, abets or otherwise knowingly facilitates or is an accessory to the contravention of these Regulations, commit an offence and is liable, on summary conviction in a Resident Magistrate's Court, to a fine not exceeding one thousand dollars or to imprisonment for a term not exceeding three months or to both such fine and Offences and penalties.

3.
Pursuant to the mandatory statutory obligations which are imposed upon a Contractor General by Section 21 of the Contractor General Act, the OCG is hereby formally referring a copy of this Report to the Commissioner of Police and the Learned DPP for them to undertake such further investigations, as they may deem to be appropriate, into the actions of Mr. Ian Moore, Mr. Stephen Wedderburn and Mr. Conrad Kerr with respect to the multiple irregularities and improprieties which have been identified by the OCG during the course of its Investigation and which have been documented herein.
In particular, the matter is being referred to the Commissioner of Police and the DPP for them to determine whether Mr. Ian Moore and/or Mr. Stephen Wedderburn used their respective Public Offices in a conspiratory, fraudulent, corrupt, clandestine and/or _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 580 of 609 LNG Investigation surreptitious manner to enure a future illicit benefit for themselves, Caribbean LNG (Jamaica) Limited and/or the Exmar Consortium through, inter alia, the irregular utilization of proprietary insider information and/or through the exhibition of a bias or preferential treatment towards Exmar Marine NV, in the referenced tender process for the ‘FSRU LNG Project’.
The investigations should, among other things, specifically seek to determine whether there was a conspiracy or agreement between Mr. Ian Moore and/or Mr. Stephen Wedderburn and/or any or all of the named persons to facilitate, inter alia, what could be the possible commission, on the part of any and/or all of them, of an act or acts of corruption, contrary to Section 14 of the Corruption Prevention Act, or to otherwise determine if Mr. Ian Moore and/or Mr. Stephen Wedderburn and/or any or all of the named persons may have committed or aided and abetted an act or acts of corruption or other criminal offence.
5.
Pursuant to the mandatory statutory obligations which are imposed upon a Contractor General by Section 21 of the Contractor General Act, the OCG is hereby formally referring a copy of this Report to the Learned Director of Public Prosecutions (DPP) for such further action as she may deem to be appropriate on the basis that the OCG has found that there is sufficient evidence which is contained herein and, more particularly and importantly, in the sworn statements that were furnished to the OCG by the relevant Respondents, to suggest that the PCJ and, more precisely, its lawful Accounting Officer, Mrs. Hillary Alexander, aided and abetted by Mr. Stephen Wedderburn, caused a Government contract to be irregularly, improperly and unlawfully awarded to CH-IV International, in contravention of the approval requirements of the RPPH and, consequently, in contravention of the Public Sector Procurement Regulations which make such breaches a criminal offence.
It is instructive to note that the Public Sector Procurement Regulations were promulgated with the approval of the Cabinet of the Government of Jamaica, effective 2008 December, with the intent of giving legal force to, and imposing criminal sanctions for, _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 581 of 609 LNG Investigation breaches of the GOJ’s Procurement Rules.
The OCG has found that the 2010 April contract which was awarded to CH-IV International, by the PCJ, was awarded in breach of Subsection S-2040 of the RPPH.

These are the applicable provisions which govern the approval requirements which were applicable to the award of a contract to CH-IV International.

Further, the OCG has found that CH-IV had already begun to evaluate bids for the ‘FSRU LNG Project’ prior to the signing of a formal contract on 2010 April 8.
The evidence which was provided to the OCG indicates that the PCJ failed to secure the necessary prior approvals of the NCC which would have been required for the increase in the scope of works which the Technical Consultants were re-engaged to provide.

Section 7 of the Public Sector Procurement Regulations provides as follows: “7.
Tender Proceedings for prospective government contracts shall be conducted according to the procedures outlined in the Handbook, as amended from time to time, and more particularly for the purposes of these Regulations the procedures as regards- (a) invitations to tender; (b) qualification of suppliers; (c) requirements for the publicising of bid Opportunities and Contracts; (d) receipt and opening of bids; (e) bid validity; and (f) bid evaluation” Section 40 of the Public Sector Procurement Regulations provides as follows: “40.
A person who- (a) contravenes these Regulations; or (b) aids, abets or otherwise knowingly facilitates or is an accessory to the contravention of these Regulations, commit an offence and is liable, on summary conviction in a _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 582 of 609 LNG Investigation Resident Magistrate's Court, to a fine not exceeding one thousand dollars or to imprisonment for a term not exceeding three months or to both such fine…” 6.
Pursuant to the mandatory statutory obligations which are imposed upon a Contractor General by Section 21 of the Contractor General Act, the OCG is hereby formally referring a copy of this Report to the Attorney General, for her to determine whether the members of the PCJ Board of Directors and/or the respective Accountable Officers within the MEM and/or the PCJ, were complicit in their statutory obligations by allowing Mr. Stephen Wedderburn to be integrally involved in the tender process for the ‘FSRU LNG Project’ despite his prior disclosure of having had commercial dealings with Exmar Marine NV.
The OCG has found that there is evidence which is recorded herein and, more particularly and importantly, in the sworn statements that were furnished to the OCG by the relevant Respondents, which would suggest that there was, inter alia, a breach of duty on the part of the then PCJ Board of Directors, in contravention, inter alia, of Sections 17(1) (a) and (b) and 6 of the Public Bodies Management and Accountability Act.
It is instructive to record that Sections 6 and 17 of the Public Bodies Management and Accountability Act impose certain specific responsibilities upon the Board of Directors of Public Bodies as well as Board Members themselves.

Had these and other responsibilities been fully discharged in the instant matter, the affairs of the PCJ and, in particular, the tender process for the ‘FSRU LNG Project’, would not have been shrouded in the appearance of unethical and/or improper practices.
It is particularly important to record that Boards of Directors of Public Bodies are appointed, inter alia, to efficiently and effectively manage the affairs of Public Bodies and to ensure the accountability of all individuals who manage and administer the affairs and resources of the said Public Bodies.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 583 of 609 LNG Investigation Section 6 of the Public Bodies Management and Accountability Act provides, inter alia, as follows: “6.
Every board shall- (c) take such steps as are necessary- (iii)for the efficient and effective management of the Public Body; (iv) to ensure the accountability of all persons who manage the resources of the Public Body; (d) develop adequate information, control, evaluation and reporting systems within the body; (c) develop specific and measurable objectives and performance targets for that body; (d) advise the responsible Minister on matters of general policy relating to the management of the body”.
Section 17 (1) of the Public Bodies Management and Accountability Act provides, inter alia, as follows: 17- (1) “Every director and officer of a Public Body shall, in the exercise of his powers and the performance of his duties- (c) act honestly and in good faith in the best interests of the Public Body; and (d) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances including, but not limited to the general knowledge, skill and experience of the director or officer.
Section 25 of the Public Bodies Management and Accountability Act provides, inter alia, as follows: 25.
(1) If the Court is satisfied on an application by the Attorney-General that any person has contravened any of the provisions of- (a) section 4 (acquisition of shares and payment of dividends); (b) section 5 (exercise of borrowing powers); _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 584 of 609 LNG Investigation (c) section 6 (corporate governance); (d) section 14 (general duties of auditors); (e) section 15 (failure to furnish information to auditor); (f) section 20 (levels of emoluments); (g) section 21 (restriction on formation of new companies), the Court may exercise any of the powers referred to in subsection (2).
(2) The Court may- (a) order the person concerned to pay to the Crown such pecuniary penalty not exceeding one million dollars; or (b) grant an injunction restraining that person from engaging in conduct described in subsection (1).
(3) In exercising its powers under this section the Court shall have regard to a) the nature and extent of the default; (b) the nature and extent of any loss suffered by any person as a result of the default; (c) the circumstances of the default; (d) any previous determination against the person concerned.
(4) If in the opinion of the Attorney General there is a contravention of section 7, 8 or 9, he may make an application to the Court and the provisions of subsections (1), (2) and (3) shall apply in relation thereto.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 585 of 609 LNG Investigation Recommendations Section 20 (1) of the Contractor-General Act mandates that “after conducting an Investigation under this Act, a Contractor-General shall, in writing, inform the principal officer of the public body concerned and the Minister having responsibility therefore of the result of that Investigation and make such Recommendations as he considers necessary in respect of the matter which was investigated.” (OCG Emphasis) In light of the foregoing, and having regard to the Findings and Conclusions that are detailed herein, the OCG now makes the following considered Recommendations: 1.
The OCG must strongly recommend that the current tender process for the ‘FSRU LNG Project’ be immediately and summarily aborted and a new OCG supervised and scrutinized process be undertaken by the PCJ and the MEM.
The foregoing Recommendation is one which is buttressed by the OCG’s unearthing of overwhelming and incontrovertible evidence which is indicative, inter alia, of a lack of transparency, the absence of fairness, and a glaring demonstration of impropriety and irregularity in the circumstances which surrounded the bidding process for the referenced FSRU LNG Project.
The OCG’s Recommendation is also founded upon the conflict of interest issues, and the documented bias and preferential treatment, which were displayed by Mr. Stephen Wedderburn in favour of the ‘preferred bidder’, Exmar Marine NV – a company with which Mr. Wedderburn had himself declared that he had a previous working relationship, as well as a pecuniary interest which was predicated upon the success of an Exmar Marine NV related project which was to be executed in Colombia.

2.
2.

The OCG must recommend that Accounting and/or Accountable Officers should scrupulously adhere to the GOJ Procurement Guidelines and Regulations in the award of contracts.
Further, the OCG must also highlight and recommend that in instances in which approval _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 586 of 609 LNG Investigation for the award of a Government contract is being granted by an Accounting and/or Accountable Officer, any such approval must be given within the parameters of the established GOJ procurement and accounting procedures.

3.
3.

The OCG recommends that in instances in which a Public Body has identified that there is a breach of the procurement procedures, the responsible agency should seek to remedy the said breach in an expeditious and effective manner, as opposed to continuing with the implementation of the project in violation of applicable GOJ Public Sector Procurement Procedures, the Regulations and other governing laws.

4.
4.

The OCG also feels compelled to strongly recommend that the Cabinet should move with expedition to develop and to implement a comprehensive and over-riding policy to be applicable to all Public Body Boards, to govern, restrict or prohibit, for a specified time, as the case may be, the award of Government contracts (or the divestment of publicly owned assets) by a Public Body, to former members of its Board of Directors, or to any entity in which a former Board member may have a pecuniary interest.

5.
5.

Transparency, the appearance of fairness and the need to avoid the possibility of a conflict of interest, in the public procurement process, require that there should be, among other things, a distinct separation of the Public Officials and Officers who sit and vote on a Public Body’s established Procurement Committee with respect to a particular procurement, and the Officials and Officers who grant final approval for the procurement.
Consequently, the OCG recommends that these considerations should be bourne in mind when appointing persons to the PCJ’s Board of Directors, the PCJ’s Evaluation Committee, the PCJ’s Procurement Committee and any other established PCJ Committee, so as to ensure that the highest possible degree of integrity and objectivity in the execution of the respective functions of the said Committees is attained.

6.
6.

The OCG is compelled to remind Public Officials who are involved in the procurement process that they are required to uphold the highest standards of ethical conduct, and to _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 587 of 609 LNG Investigation observe the GOJ’s Code of Conduct for Civil Servants which is outlined in the Staff Orders.
Above all, Public Officials should, at all times, remain free of interest in relationships that could be potentially detrimental to the best interests of the GOJ.

Consequently, Public Officials should not participate and/or engage in any GOJ process which is related to a transaction which is to be executed between the GOJ and a company or entity, or its associated affiliates, divisions or subsidiaries, in which the Public Official has an interest.
Further, Public Body individuals who are involved in the procurement process should disclose any personal or other relationships and interests which they may have with a bidder, supplier, contractor and/or consultant.

Pursuant to Section 4, Volume 1, of the Revised GOJ Public Sector Procedures (2010 October), such Public Body individuals should not take part in either the decision-making process, or the implementation of any contract, where any such relationship or interest exist.

7.
7.

Heads of Ministries, Departments and Agencies who are aware that a Public Officer is in a conflict of interest situation are strongly recommended to take the necessary action, in accordance with applicable administrative procedures, to remove such an officer from the conflicted situation.

Such action will ensure legitimacy and good governance in the administration and management of the GOJ’s procurement process and the GOJ’s affairs.

8.
8.

The OCG believes that it is timely to remind all Public Officials/Officers, who abuse their office and authority for personal gain and/or for the benefit of others, that there are circumstances in which such conduct is likely to rise to the level of a criminal act of corruption.

The provisions that are contained in Section 14 (1) (b) of the Corruption Prevention Act are instructive in this regard.
They provide simply that “A public servant commits an act of corruption if he, in the performance of his public functions, does any act or omits to do any act for the purpose of obtaining any illicit benefit for himself or any other person”.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 588 of 609 LNG Investigation An act of corruption is punishable upon summary conviction in a Resident Magistrate's Court, in the case of a first offence, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding two years, or to both such fine and imprisonment; and in the case of a second or subsequent offence, to a fine not exceeding three million dollars or to imprisonment for a term not exceeding three years, or to both such fine and imprisonment; Upon conviction in a Circuit Court, an act of corruption is punishable, in the case of a first offence, to a fine not exceeding five million dollars or to imprisonment for a term not exceeding five years, or to both such fine and imprisonment; and in the case of a second or subsequent offence, to a fine not exceeding ten million dollars, or to imprisonment for a term not exceeding ten years or to both such fine and imprisonment.
9.

The OCG wishes to strongly reiterate a recommendation that it has previously made that the GOJ should implement and adopt an anti-corruption measure to impose the following mandatory requirements as a part of the its contracting and procurement processes: i.
All Private Entities that are desirous of bidding or tendering on Government contracts which exceed $275,000 in value and/or who are part of a ‘Consortium’ which is bidding on a Government contract should be required to disclose sworn particulars of all of its beneficial owners.

ii.
ii.

A “Private Entity” should be deemed to be an entity which is not a publicly listed company or corporation but which is a privately owned or held sole- tradership, partnership, cooperative, company, corporation, trust, business association or other entity.

iii.
The particulars which should be required to be disclosed should include: a) The name(s) of the beneficial owner(s) of the Private Entity; _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 589 of 609 LNG Investigation b) The title(s) of the beneficial owner(s); c) The current nationality(ies), address(es) and telephone number(s) of the beneficial owner(s); d) The nature, share or percentage of the owner’s beneficial interest in the Private Entity; e) The date(s) on which the beneficial interest in the Private Entity was acquired.
iv.

The Disclosure requirement should be a standard component and ‘Responsiveness Criterion’ for all GOJ Tender Documents, Requests for Proposals and Invitations to Tender, such that any Tender or Bid which is unsupported by the Disclosure will be rendered non-responsive and invalid and, thus, null and void.

v. The particulars of beneficial owners should be required to be declared and certified before a Justice of the Peace or a Notary Public, to be complete, accurate and truthful.
If a false statement or declaration is made in any Disclosure Form, the maker thereof should be deemed to have committed a criminal offence.

10.
Finally, it is recommended that the Ministry of Finance and the Public Service should issue a Circular to all Public Bodies, Departments and Agencies of Government, to advise that a Contractor General, pursuant to Section 4 of the Contractor General Act, has lawful jurisdiction over the award and implementation of all government contracts, to ensure merit, impartiality, propriety and regularity in the said award, irrespective of whether any such contracts have been exempted, by the Government, from the purview of its procurement guidelines.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 590 of 609 LNG Investigation Special Note and Recommendation The OCG, in the conduct of the referenced Statutory Investigation, has been faced with what is best described as a seemingly debilitating and potentially costly obstacle in the execution of its statutory mandate to “ensure”, inter alia, that Government contracts are awarded impartially and on merit, and in circumstances which do not involve impropriety or irregularity.
In the discharge of its statutory mandate, the OCG, in 2010 June, had highlighted certain inherently critical and fundamentally flawed occurrences in the formal tender process for the ‘FSRU LNG Project’ which was being undertaken by the PCJ/MEM.

The OCG’s concerns and suspicions were articulated in its Formal Letters of Enquiry which were addressed to the Accounting and Accountable Officers of the MEM and the PCJ, and which were dated 2010 June 22, regarding the ‘FSRU LNG Project’.
However, and despite the OCG’s documented concerns that the good governance tenets of public contracting, which have been imposed by Parliament upon Public Bodies and Public Officers, were being violated, a seemingly cavalier and arbitrary decision was nevertheless taken by the current GOJ Administration to proceed with the tender process for the ‘FSRU LNG Project’, without any due consideration whatsoever being given to the stated OCG concerns.
Indeed, it is instructive to note that, on 2010 July 1, an article was published on the Radio Jamaica website which was entitled “LNG deal with Exmar stands – Golding”.

The referenced media article indicated as follows: “The Prime Minister has declared that the government will not stop the push for a cheaper energy alternative to oil.

This is despite the Contractor General's probe of the award of the contract to the Exmar Consortium to supply Liquid Natural Gas (LNG) to Jamaica.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 591 of 609 LNG Investigation “Greg Christie (Contractor General), God bless him, says he wants to scrutinize the whole transaction to see how we got to where we got to and I say yes, we welcome that.
But in the meanwhile, we need to get cheaper energy to the productive sector, so you go on looking at it but we’re going to continue negotiating because we want to get this in place as quickly as possible,” Mr. Golding said.” Further, on 2010 July 2, an article was published in the Jamaica Gleaner, which was entitled “LNG financing, supplies unsettled”.
The referenced media article indicated, inter alia, as follows: “The consortium will absorb all the financial risk, with no backing from Jamaica, neither in the form of capital or loan guarantees, Energy Minister James Robertson affirmed.

Jamaica, however, has put $1 billion into the LNG plan, some of it funding from multilateral sources, according to Robertson and acting managing director of the Petroleum Corporation (PCJ) of Jamaica Nigel Logan.
Robertson, who along with the consortium members, met Tuesday with Gleaner editors, said the project is unlikely to enter its mobilisation phase before January 2011, but that the supply contracts should be tied down by year end.
The contractor general's probe of the procurement process, including the role of former PCJ chairman Ian Moore - a director of CLNG - in the selection of the Exmar consortium, will not slow the negotiations nor the project, Robertson said.” For the avoidance of doubt, it must be recalled, and emphasized, that the OCG is an Independent, Quasi-Judicial Anti-Corruption Commission of the Parliament of Jamaica, which was established by law, for the purposes of ‘ensuring’, among other things, probity, competition, transparency, accountability, and value for money in the award of Government of Jamaica contracts and, to that end, is empowered to monitor and to investigate the award of Government contracts.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 592 of 609 LNG Investigation However, it is well known that the OCG has no powers under the law to enforce its own recommendations, or to bring to a halt a Government procurement or contracting process which it has good reason to believe is exhibiting signs of corruption, impropriety or irregularity.
The inescapable question which must be forcefully asked, therefore, is what good purpose is served by maintaining, in place, a Commission of the Contractor General, at a cost to the Jamaican taxpayer which is currently in excess of $180 million per annum, if the considered concerns, recommendations, injunctions and/or findings of the OCG can be summarily and arbitrarily ignored by the Executive arm of the State, the very authority which the OCG was established to monitor and to investigate?
Is it that the OCG was intended by the Executive and Legislative arms of the Jamaican State to be a toothless bulldog?
Or is it that Parliament, in enacting the Contractor General Act, and by requiring a Contractor General to swear to a solemn Oath to “ensure” that Government contracts are awarded ‘impartially and on merit and in circumstances that do not involve impropriety or irregularity’, was being insincere in its injunction by virtue of the simple fact that it has refused and/or has failed to date to give to the Contractor General the very tools and powers which he obviously requires to enable him to effectively discharge and to enforce his mandate?
It is respectfully submitted that these are very serious and critical questions in respect of which the taxpayers of Jamaica must demand, and should be provided with, credible and responsible answers, not only from the incumbent Administration, but also from the State.
It is against this background, and having regard to the substantive Findings which are embodied in this Report of Investigation, as well as in light of the considered Conclusions and Recommendations that are detailed herein, that the OCG now feels compelled to once again reiterate its Recommendation that the powers with which it is imbued, under the Contractor General Act, be significantly strengthened to, among other things, empower a Contractor General to bring to a halt a Government procurement, contract award or asset divestment process _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 593 of 609 LNG Investigation which is, in the OCG’s considered view, exhibiting patent signs of impropriety, irregularity or corruption.
There is nothing which is untoward or exceptional about the OCG’s recommendation that the Contractor General Act should be amended and strengthened for the purposes of giving the Commission the power to halt a Government contracting activity, pending the outcome of an Investigation, nor is the OCG’s posture one which should be considered as being ill-conceived.
Indeed, a similar power, for a national procurement regulatory commission, has been proposed for consideration by the Trinidad and Tobago Legislature, in the “Draft Legislative Proposal for an Act to be called Public Procurement and Disposal of Public Property Act, 2010”.
Section 13 (4) of the referenced Draft Bill provides that “The Commission upon hearing the parties to a transaction may direct the suspension of the procurement process pertaining to a transaction pending the outcome of an investigation and in so doing shall provide reasons.” Consistent with the foregoing draft provision, it is widely known that the OCG, in Jamaica, upon or before the initiation of a major Investigation, will publicly provide detailed and cogent reasons for the recommendations which it makes to the Government to halt an irregular procurement.
Such disclosures are deliberately made by the OCG, out of an abundance of caution, to ensure, among other things, that its reasons for initiating an Investigation are not only well founded, but can withstand public scrutiny, should the need arise.

This strategic OCG measure was exhibited as recently as 2011 January in respect of the GOJ’s then Proposed Sale of the Sandals Whitehouse Hotel to the Gordon ‘Butch’ Stewart led Sandals Group.
However, and despite the OCG’s 22 page documented reasons for making its Recommendations to halt the proposed divestment, and to restart the same under the direct monitoring supervision of the OCG as is required by law, the OCG’s Recommendations were summarily set aside by the incumbent Administration which declared that the Sale would proceed despite the OCG’s _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 594 of 609 LNG Investigation expressed concerns, positions and Recommendations.
To further compound the matter, it was also indicated by the Administration that such Recommendations from the OCG were immature because the OCG’s Investigation was not yet completed.
This raises another curious question as to whose interests are being served when an Administration is allowed to proceed with a Government contracting activity which is presumed to be irregular, improper or corrupt, by simply stating that it, the Administration, will act after the OCG’s Investigation therein is completed, when it knows full well that the horse would have already bolted from the gate and that no effective remedial actions can be taken after the fact.
It is also instructive to note that, in 2010 July, the OCG was faced with a similar challenge regarding its Investigation into the divestment of a lucrative state asset, namely the divestment of the GOJ’s 45% stake in JAMALCO to the Chinese firm Zhuhai Hongfan.
In the referenced case, the OCG detailed at least five (5) major considerations, which, when taken together, raised very serious questions about transparency, value for money, competition and a potential conflict of interest, amongst other concerns, in respect of the proposed asset divestment.
However, and despite the foregoing expressed concerns, it was reported in the Jamaica Observer newspaper on Wednesday 2010 June 9, as follows: “Responding to questions from the Opposition spokesman on energy Phillip Paulwell yesterday, Robertson said that the Government had no plan to halt the negotiations despite the (OCG’s) investigation.

"The Government has entered into a legally binding contract and we will not be halting.

We will be co-operating fully with the contractor general.
We are not in a position to halt, we have entered into a contract and it is a very good contract in the interest of the _____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 595 of 609 LNG Investigation country," Robertson told Paulwell.” Not surprisingly, the fact is that the Government has since reportedly abandoned its so called “legally binding contract” with Zhuhai Hongfan, a development which will be publicly addressed by the OCG when it formally completes and submits its Special Report of Investigation into the matter.
Be that as it may, in the instant matter of the ‘FSRU LNG Project’, the OCG’s Findings, Conclusions and Recommendations are not only well founded in fact and in reason, but they are also buttressed by the independent Legal Opinions which were solicited by the Administration, at additional and unnecessary cost to the Jamaican taxpayer, from the private law-firm of Livingston, Alexander and Levy.
Further, and as is now known, the Livingston, Alexander and Levy Opinions have also received the support of the Government’s own attorney, the Solicitor General.
The referenced Opinions are not only highly indicative of those of the OCG’s expressed concerns which were communicated to the Government from as early as 2010 June 22, but they also fully support the OCG’s formal recommendation, which was made to the MEM, at the MEM’s request, by way of letter which was dated 2010 November 16, wherein the Government was urged by the OCG to “summarily and immediately abort the subject process”.
It is critical to note that the referenced OCG letter was copied to the Honourable Prime Minister, the Honourable Minister of Energy and Mining, the MEM Permanent Secretary and the Group Managing Director (Acg.)

of the PCJ.

The Legal Opinions also lend legitimacy to the OCG’s call for the Commission of the Contractor General, in the public interest, to be urgently endowed with the power to halt the award of a GOJ contract when signs of irregularity or impropriety are being exhibited.
_____________________________________________________________________________________ 2011 May Office of the Contractor General OPM/PCJ/MEM Page 596 of 609 LNG Investigation When fully contextualized, it is now crystal clear, from the matters that are set our herein, that the circumstances which surround the development, tender and approval for the award of a contract for the ‘FSRU LNG Project’, are such that they cannot, whether individually or collectively, withstand public scrutiny and/or any measure for probity.
In the final analysis, it must be said that had the warnings, concerns and/or considered Recommedation of the OCG been heeded by the Administration when they were formally communicated on 2010 June 22, and again on 2010 November 16, and had the Government responded then by halting the tender process for the FSRU LNG Project, and taken the decision to immediately restart same under the supervision of the OCG, the massive losses which the Jamaican taxpayer will now have to bear in consequence, inter alia, of the delayed restart of the ‘FSRU LNG Project’, would have been entirely avoided.
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