Anti-corruption law needed for oil and gas
Bill could be pushed through parliament as emergency legislation
Almost a year has passed since
EXECUTIVE first reported on a new draft law aiming to stamp out corruption at various points along the life cycle of an oil and gas project. It is an understandable delay given that parliament has only ratified emergency laws and, after an over three year wait, cabinet has yet to pass two decrees needed to move Lebanon’s first offshore licensing round forward.
An early July meeting between the country’s Speaker of Parliament Nabih Berri and leader of the Free Patriotic Movement Gebran Bassil, whose party has dominated the early stages of developing the oil and gas file, raised concerns over a possible ‘back-room deal’ [see cover story page 14] over the sector’s future and, possibly, the fate of potential contracts and hoped-for revenues. If the need for strong anti-corruption rules for this sector was not apparent before, it is now.
That there is suspicion over the so-called deal between Berri and Bassil hardly comes as a surprise. This is an industry that has proven mostly opaque in much of the world and Lebanon is a country that, according to a ranking by global watchdog Transparency International, is deemed mostly corrupt. The anticorruption law, proposed by MP Joseph Maalouf in 2015, promises an injection of transparency on the awarding of bids and subcontracting, as well as revenues flowing to the government’s coffers.
In an interview discussing updates to the draft law, Maalouf tells Executive he will have a formal draft prepared by the end of July to present to the Parliamentary Committee on Public Works, Energy and Water for review and, he hopes, approval. Upon committee approval the proposed legislation would be sent to other committees and joint committees for discussion. Speaker Berri, Maalouf told Executive last year and again now, is very supportive of the anti-corruption law. He hopes that high priority status might be enough to champion the bill as emergency legislation.
In the past, the indication was that Speaker Berri wanted the offshore blocks to be smaller and that he wanted to offer all of them at once for bidding. Prior to this interview, we were told that the Speaker has changed his mind and agreed to the blocks as the size that they currently are and agreed to what they call gradual licensing. What’s the distinction?
There’s a difference between gradual licensing and offering the blocks. You can offer all ten blocks and then you license them gradually based on what prequalified companies come back with and based on the terms around each block, and on the various 3D scans that were done. So you would determine based on which company is interested in which block to develop certain prioritization criteria and you would license the blocks accordingly.