Stop­ping the spill

Pre­vent­ing cor­rup­tion with new trans­parency laws

Executive Magazine - - Leaders -

ar is com­ing. The bat­tles ahead will not be fought on land or sea. They will be waged in par­lia­men­tary ses­sions and cab­i­net meet­ings. Our en­emy is ready­ing for an in­va­sion so our de­fenses must be im­pen­e­tra­ble. As Le­banon slowly de­vel­ops an oil and gas in­dus­try, we need weapons pur­pose-built to pre­vent the sys­temic cor­rup­tion that is de­stroy­ing this coun­try from win­ning ter­ri­tory in this new sec­tor. The law is our sword in this fight, so we must forge it well.

All too of­ten, peo­ple liv­ing in Le­banon de­nounce the coun­try’s per­ceived law­less­ness, wish­ing it were more like Europe or the United States of Amer­ica. There seems to be a no­tion that elected of­fi­cials, cor­po­rate big­wigs and av­er­age cit­i­zens in the EU and US are more up­stand­ing or less prone to cor­rup­tion and dirty deal­ing. That, how­ever, is sim­ply false. If there is less cor­rup­tion in the EU and US than there is in Le­banon, it is only be­cause these ju­ris­dic­tions im­ple­ment and en­force their laws, not be­cause peo­ple there are some­how morally su­pe­rior. Build­ing a clean hy­dro­car­bon in­dus­try in Le­banon will not be easy, but it’s also not im­pos­si­ble.

To stop cor­rup­tion from spoil­ing this sec­tor will re­quire the strict en­force­ment of well pre­pared and ef­fec­tive leg­is­la­tion. The evolv­ing le­gal frame­work, as they say, looks good on pa­per, with

Wthe ex­cep­tion of a loop­hole that al­lowed two lo­cal busi­ness­men to es­tab­lish a com­pany in Hong Kong, ob­scure their own­er­ship and pre-qual­ify for a li­cens­ing round with no pre­vi­ous ex­pe­ri­ence aside from find­ing a qual­i­fied part­ner. MP Joseph Maalouf’s oil and gas trans­parency law (see story page 30) is welcome and should be fully ap­proved and ready for im­ple­men­ta­tion be­fore the first ex­ploratory wells are drilled. The chal­lenge mov­ing for­ward will be en­force­ment. Le­banon al­ready has plenty of good laws, the prob­lem is that nearly ev­ery­one (cit­i­zens, po­lice of­fi­cers, elected of­fi­cials) ig­nores them. This can­not be al­lowed to hap­pen with oil and gas. We need vi­cious and well-trained watch­dogs both in­side and out­side the sys­tem.

If hy­dro­car­bons are found and ex­ploitable, they will be­long to ev­ery Le­banese. If and when the money comes, its man­age­ment must be ab­so­lutely trans­par­ent. The gov­ern­ment wants to cre­ate a sov­er­eign wealth fund (see story page 34) which is a po­ten­tially great idea. Draft­ing the law that will gov­ern that fund must be a public process. De­bates about how the fund should op­er­ate must be held in public, not be­hind closed doors. The fund law must also cre­ate an in­de­pen­dent au­thor­ity to mon­i­tor rev­enues in or­der to com­ple­ment the par­al­lel over­sight work that lo­cal NGOs will be con­duct­ing. Trans­parency must be the corner­stone on which this in­dus­try is built. For a start, the public de­serves to know why there is al­ready a loop­hole al­low­ing un­qual­i­fied com­pa­nies to bid for the ex­ploita­tion of our po­ten­tial re­sources. We must be pre­pared. We must be vig­i­lant. We must win this time.

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