Oil & gas: Take the lead on trans­parency

In or­der to have trans­parency in oil and gas, civil so­ci­ety needs to push the gov­ern­ment to adopt the EITI

Executive Magazine - - Contents -

It’s too soon to say whether Le­banon’s po­ten­tial oil and gas re­sources are truly a game changer or not. But if the re­sources might sig­nif­i­cantly al­ter the tra­jec­tory of the coun­try — its econ­omy, its busi­nesses, its peo­ple and their way of life — then Le­banese civil so­ci­ety must vig­or­ously im­press val­ues of trans­parency and ac­count­abil­ity upon the man­age­ment of this sec­tor. One im­por­tant com­po­nent of this is the Ex­trac­tive In­dus­tries Trans­parency Ini­tia­tive (EITI, see ar­ti­cle page 22); civil so­ci­ety must de­mand that the gov­ern­ment com­mit to im­ple­ment­ing its stan­dards.

While in­still­ing val­ues of trans­parency and ac­count­abil­ity can be re­al­ized in part through the EITI, dif­fer­ing opin­ions — for ex­am­ple, the tim­ing of its ap­pli­ca­tion and the flex­i­bil­ity of its re­quire­ments — found within Le­banon’s civil so­ci­ety must first be cal­i­brated. While some be­lieve the EITI can be use­ful now, even be­fore petroleum con­tracts are signed, oth­ers ar­gue this could be danger­ous: if EITI stan­dards were im­ple­mented now but then stalled, cit­i­zens might fur­ther lose con­fi­dence in the gov­ern­ment. There is also a sug­ges­tion that EITI re­quire­ments might be too rad­i­cal to ap­ply in the Le­banese con­text. Th­ese dif­fer­ences must be ironed out if civil so­ci­ety is ever to make a con­certed push for EITI im­ple­men­ta­tion specif­i­cally, and greater trans­parency gen­er­ally. To be a true — that is, in­flu­en­tial — part­ner with the gov­ern­ment on the EITI, civil so­ci­ety must first ar­tic­u­late a com­mon stance.

The EITI em­braces trans­parency by build­ing trust among stake­hold­ers: gov­ern­ment, com­pa­nies and civil so­ci­ety. Fos­ter­ing this trust is key to the good gov­er­nance of Le­banon’s po­ten­tial re­sources, and the EITI en­cour­ages this spirit by help­ing shed light on the far­thest and dark­est cor­ners of this no­to­ri­ously shady in­dus­try. The ini­tia­tive does this by re­in­forc­ing ac­cess to in­for­ma­tion, wherein dia­logue among stake­hold­ers de­ter­mines the per­ti­nent in­for­ma­tion to in­clude in an EITI re­port — in­form­ing public de­bate and en­abling cit­i­zens to bet­ter grasp how the sec­tor is man­aged.

Ide­ally, a gov­ern­ment would al­ready col­lect much of the in­for­ma­tion that the EITI re­quires, even if it is spread across sev­eral data­bases; the re­port com­piles hard to find in­for­ma­tion into one easy to read pub­li­ca­tion. In cer­tain in­stances, Le­banon’s gov­ern­ment is al­ready col­lect­ing in­for­ma­tion that would sat­isfy EITI spec­i­fi­ca­tions, but in many cases it may not be col­lect­ing any rel­e­vant in­for­ma­tion — as of to­day, we can’t be sure. Civil so­ci­ety should work with the gov­ern­ment so that when EITI stan­dards are im­ple­mented, the com­pil­ing of in­for­ma­tion can be a smooth and pain­less tran­si­tion. Fur­ther­more, it should put in place a cul­ture for the straight­for­ward com­pi­la­tion of in­for­ma­tion for public dis­sem­i­na­tion through the EITI re­port, so that un­nec­es­sary, par­al­lel dis­clo­sure sys­tems are not con­structed.

Mak­ing in­for­ma­tion eas­ily ac­ces­si­ble through EITI re­port­ing holds value for all stake­hold­ers. It im­proves the in­vest­ment cli­mate en­vi­ron­ment by in­di­cat­ing gov­ern­ment com­mit­ment to trans­parency; it helps mit­i­gate rep­u­ta­tional risk for com­pa­nies op­er­at­ing un­der opaque gov­er­nance; and it en­ables ac­cess to public in­for­ma­tion, in­creas­ing gov­ern­ment ac­count­abil­ity to cit­i­zens.

Even though Le­banon’s first li­cens­ing round for oil and gas ex­plo­ration has stalled, pe­riph­eral av­enues can be tra­versed in mov­ing this sec­tor for­ward. Civil so­ci­ety must begin agree­ing on EITI stan­dards and articulating the mer­its the ini­tia­tive holds for ev­ery­one, thereby co­erc­ing the gov­ern­ment to de­clare its in­ten­tion to im­ple­ment.

What the gov­ern­ment needs from civil so­ci­ety is a suit­able part­ner in the gov­er­nance of this sec­tor — both con­tribut­ing to sound gov­er­nance, but also pin­point­ing ar­eas of de­fi­ciency. The gov­ern­ment should an­nounce its in­ten­tion to im­ple­ment EITI stan­dards, but it is up to civil so­ci­ety to push them to­ward the mi­cro­phone.

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