Malawi stalls probe on sus­pi­cious oil con­tracts

African Independent - - BUSINESS - COLLINS MTIKA

MALAWI’S graft-bust­ing body, the Anti-Cor­rup­tion Bureau (ACB), has stalled in­ves­ti­ga­tions on sus­pi­cious do­na­tions that were al­legedly made to former pres­i­dent Joyce’s Banda’s Mudzi Trans­for­ma­tion in ex­change for the con­tro­ver­sial award­ing of ex­plo­ration li­cences for oil blocks.

ACB is putting its foot down, say­ing it has no money. This de­spite hav­ing had a raise in the 2017/18 fis­cal bud­get.

“The in­ves­ti­ga­tions have stalled due to in­suf­fi­cient re­sources and le­gal pro­cesses that are re­quired to follow some links both within the coun­try and in other ju­ris­dic­tions out­side the coun­try,” ACB’s se­nior pub­li­cist Egrita Ndala said.

But the Nat­u­ral Re­sources Jus­tice Net­work, a coali­tion of civil so­ci­ety or­gan­i­sa­tions (CSOs) work­ing in the ex­trac­tive sec­tor, is hav­ing none of it.

“We want to call on the gov­ern­ment to make trans­par­ent the process around the rene­go­ti­a­tions of the ad­den­dum to the oil and gas agree­ments and to al­low cor­rup­tions in­ves­ti­ga­tions to be con­cluded,” said the net­work’s chair­per­son Kos­sam Mun­thali.

In May, ACB said it had launched an in­ves­ti­ga­tion into whether money ir­reg­u­larly changed hands dur­ing the rushed sign­ing of pro­duc­tion-shar­ing agree­ments on three of Malawi’s pe­tro­leum blocks eight days be­fore the 2014 elec­tions.

The probe was re­quested by a range of Malaw­ian civil so­ci­ety or­gan­i­sa­tions and in­ter­na­tional NGO Ox­fam.

“The Anti-Cor­rup­tion Bureau has been al­lo­cated a bud­get es­ti­mate amount­ing to $4 mil­lion in the 2017/18 bud­get. Of this, $1.5m is for per­sonal emol­u­ments while $2m is for cor­rup­tion preven­tion, pub­lic ed­u­ca­tion, in­ves­ti­ga­tions and prose­cu­tions,” Ndala said.

She said ACB did not only re­quire fi­nan­cial re­sources to op­er­ate ef­fec­tively, but also needed well-trained per­son­nel, enough ve­hi­cles and other rel­e­vant equip­ment which was nec­es­sary for it to carry out its op­er­a­tions.

The award­ing of six pe­tro­leum ex­plo­ration li­cences be­tween 2012 and 2014, un­der the former pres­i­den­cies of Bingu wa Mutharika and Banda, was fraught with con­tro­versy.

Less than two weeks be­fore the hotly con­tested elec­tions in May 2014, Banda’s gov­ern­ment en­tered pro­duc­tion-shar­ing agree­ments with Rak Gas MB45 – a sub­sidiary of the United Arab Emi­rates’ state-owned Rak Gas reg­is­tered in the se­crecy ju­ris­dic­tion of the Cay­man Is­lands. The deal was reached be­fore any proven oil dis­cov­er­ies.

Ac­cord­ing to records of the Re­serve Bank of Malawi, Rak Gas made an un­ex­plained pay­ment of $235 700 (89m Malawi kwacha) to the Re­serve Bank’s ac­count for the gov­ern­ment’s mines depart­ment be­fore the ex­plo­ration li­cences were handed out.

The un­usual wire trans­fer was picked up and queried by in­de­pen­dent con­sul­tants LBN Strate­gies of Cologne, Ger­many, and Li­longwe-based Re­sources M&E while ex­am­in­ing the Re­serve Bank’s ac­counts as part of a scop­ing ex­er­cise for the gov­ern­ment.

In 2015, the Ex­trac­tive In­dus­tries Trans­parency Ini­tia­tive (Eiti) Board, which met in Bern, Switzer­land, unan­i­mously ap­proved Malawi’s ap­pli­ca­tion to join the Eiti, a de­vel­op­ment that means Malawi’s nat­u­ral re­sources will be stew­arded with global stan­dards of trans­parency and ac­count­abil­ity.

Para­dox­i­cally, the coun­try’s first Eiti re­port launched in Li­longwe this week showed that 34% of the to­tal rev­enue paid to the gov­ern­ment could not be ac­counted for.

Ac­cord­ing to the re­port, $700 000 from the Depart­ment of Mines rev­enue and al­most $2m from Malawi Rev­enue Au­thor­ity has not been rec­on­ciled from a to­tal of $8m the gov­ern­ment de­clared.

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