Re­think­ing gov­er­nance

Trans­parency is para­mount if Le­banon’s oil and gas in­dus­try wants to suc­ceed

Executive Magazine - - Last Word - SAMI ATALLAH is the di­rec­tor of the Le­banese Cen­ter for Pol­icy Stud­ies

The re­cent garbage cri­sis has man­aged to ex­pose a myr­iad of prob­lems which ex­ist in our po­lit­i­cal sys­tem. Among these is the fail­ure of the gov­ern­ment not only to prop­erly de­liver a ba­sic ser­vice like waste col­lec­tion, but to de­cide how to de­liver such a ser­vice through a trans­par­ent, col­lab­o­ra­tive process. In other words, the prob­lem is not only the out­come but the ac­tual process, which is a key de­ter­mi­nant of good and ef­fec­tive ser­vice de­liv­ery. Of­ten, the more trans­par­ent, ac­count­able, and in­clu­sive a de­ci­sion-mak­ing process is, the bet­ter the ser­vice is in terms of price and qual­ity. The less trans­par­ent de­ci­sion mak­ing is, the worse off the re­sult.

With the gov­ern­ment’s fail­ure to pro­vide waste col­lec­tion ser­vices— gen­er­ally con­sid­ered to be a rel­a­tively straight­for­ward ex­er­cise— one can only won­der how it will be able to man­age a com­plex sec­tor like oil and gas, which has sev­eral stake­hold­ers with vary­ing in­ter­ests at dif­fer­ent stages of the value chain.


De­spite be­ing a late­comer to the Le­vant Basin, Le­banon moved fairly quickly in the process. The par­lia­ment passed the off­shore law in 2010 and set up the Le­banese Petroleum Ad­min­is­tra­tion (LPA), which pre­pared the bid­ding-re­lated de­crees, only to fall prey to Le­banon’s de­ci­sion-mak­ing quag­mire.

The LPA, whose mem­bers mir­ror the sec­tar­ian rep­re­sen­ta­tion of the coun­try, with a one-year pres­i­den­tial ro­ta­tion for each of its six mem­bers, failed to as­suage po­lit­i­cal elites’ fears of los­ing in­flu­ence over the sec­tor. In April 2014, the gov­ern­ment set up a min­is­te­rial com­mit­tee to ad­vise the gov­ern­ment on how to pro­ceed with the oil and gas sec­tor, hence du­pli­cat­ing the role of the LPA. If the com­mit­tee’s work is to en­sure that the LPA is per­form­ing well, one won­ders why they have only man­aged to meet twice and have kept the process closed to the public, thereby rais­ing more con­cerns as op­posed to eas­ing public fears of cor­rup­tion.

Fur­ther­more, the prob­lem does not rest only with the ex­ec­u­tive body. The il­le­git­i­mate par­lia­ment has also failed to play its role in ask­ing the gov­ern­ment where it stands on the de­vel­op­ment of the sec­tor. In fact, some MPs have shown they have lit­tle in­ter­est in and knowl­edge about the sec­tor. This is wor­ri­some as they ought to play a ma­jor role in es­tab­lish­ing the sec­tor and en­sur­ing that it will be prop­erly man­aged.


Some have ar­gued that the sec­tor will re­main par­a­lyzed in the ab­sence of a pres­i­dent and a new gov­ern­ment. Un­for­tu­nately, this think­ing is flawed. The for­ma­tion of a new gov­ern­ment and swear­ing in of a pres­i­dent will only give a sem­blance of nor­malcy in a coun­try where such a state of af­fairs gen­er­ally leads to col­lu­sion among the po­lit­i­cal elite at the ex­pense of cit­i­zens’ wel­fare.

What Le­banon needs is a dif­fer­ent gov­ern­ing struc­ture where state in­sti­tu­tions are ac­tu­ally func­tion­ing, trans­par­ent, in­clu­sive, and ac­count­able. The chal­lenge we face is be­yond the LPA. We need a re­spon­si­ble gov­ern­ment that is able to put a petroleum pol­icy in place and put it up to de­bate among the wider public. We need it to ac­tu­ally ad­dress the two de­crees that are col­lect­ing dust. Equally im­por­tant, we need it to launch a broad con­sul­ta­tive process to reach a con­sen­sus on how to man­age our nat­u­ral re­sources. We need a par­lia­ment that cares to ask the ex­ec­u­tive body where it stands and why progress in the sec­tor has been de­layed. We need over­sight agen­cies to be equipped to deal with a very com­plex sec­tor that in­volves in­ter­na­tional oil com­pa­nies, whose re­sources and ca­pa­bil­i­ties can over­whelm the coun­try’s in­sti­tu­tions. We need a ju­di­ciary pre­pared to prop­erly en­force con­tracts that in­clude ser­vice com­pa­nies as well. We need the LPA to in­sti­tu­tion­al­ize the con­sul­ta­tion process with the wider public as well as make public its de­ci­sions that are re­layed to the gov­ern­ment.

In the mean­time, the Le­banese Cen­ter for Pol­icy Stud­ies, as a think tank and part of the civil so­ci­ety com­mu­nity, needs to be ready to en­gage in the process, in­form the public, and mon­i­tor the gov­ern­ment. We, along with other civil so­ci­ety or­gan­i­sa­tions, must cre­ate enough pres­sure to en­sure that the gov­ern­ment is held ac­count­able, that the bid­ding process is trans­par­ent, and that con­tracts are suf­fi­ciently dis­closed.

The fall in oil prices by half, which makes deep wa­ter ex­trac­tion less prof­itable, may pro­vide Le­banon with a chance to post­pone the de­vel­op­ment of the sec­tor and re­con­sider its gov­ern­ing struc­ture. The big ques­tion is: Will the po­lit­i­cal elite have the wis­dom to re­struc­ture in­sti­tu­tions so they be­come more ef­fec­tive or will they keep un­der­min­ing in­sti­tu­tions so the elite can try to ben­e­fit from the mess they are cre­at­ing? If the lat­ter is more likely than the for­mer, then we must be very aware of the dan­gers that face us and ready to face the oil tsunami that could very well bury us all.


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