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
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.