CONTEXT OF LAWS THAT WERE ADOPTED IN 2022

At a time when much of the debate has been focusing on the preconditions and legal measures linked to an IMF deal, it is worth noting that Lebanese Parliament has taken some legislative decisions that are not required as preconditions for an IMF deal. Some of these met emergency needs without adding to the longer-term prospects of tax fairness and development but were of peripheral relevance for negotiations with international funders, such as the laws on borrowing to finance grain and medicine importation and disbursal. Other laws carry positive implications, foremost among them the procurement law. Examples for this legislative action are the following:

Law No. 304 dated 28/10/2022

This law provides for a mechanism for opening credits and disbursement of the loan agreement provided by the World Bank at a value of $150 million to implement the emergency response project to secure wheat supplies.

With dual background in the local economic crisis and global food price inflation, the law met an emergency need. Since Lebanon relies on importing a majority of its goods, such as wheat, and the imports need to be paid in dollars, as the economic crisis has worsened, the cost of paying for these imports has drastically increased.

Law No. 287 of 12/4/2022 to support the locally produced pharmaceutical industry

Similar to Law 304, the Law 287 was adopted in an attempt to mitigate an acute crisis that has manifested itself in the inability of private households and public health insurance providers, and the Ministry of Public Health (MoPH) as defacto insurer of last resort, to cover the cost of healthcare, including medicines.

After the approval of this law proposal in Parliament, a plan by the MoPH is to further increase substitution of imported medical drugs with locally produced ones. Under the plan, whenever pharmaceutical producers in Lebanon complete the process of registering a local drug as an alternative to the imported one and put it on the market, remaining subsidies for the imported substance are automatically lifted.

The Conventional Mediation Law

The oft-lamented slowness of the Lebanese legal system in resolving commercial disputes has been exacerbated in recent years in the form of growing backlogs of court cases at times when judges and courts were not able to function normally or even paralyzed by strikes. Mediation, as an alternative method for resolving disputes, was the subject of the Conventional Mediation Law 286 which was adopted in Parliament on March 29, 2022.

Mediation in this sense of resolving disputes between parties to a business contract is “a flexible process conducted confidentially in which a neutral person, the Mediator, actively assists the parties in working towards a negotiated agreement of a dispute or difference, with the parties in ultimate control of the decision to settle and the terms of resolution,” explains Diana Bou Ghannam, an associate at law firm El Muhtar and Associates.

The Conventional Mediation Law of 2022, which followed after and complemented the issuance of a Judicial Mediation Law in October 2018, opened alternative dispute resolution options to litigants in various fields and use mediation in resolving their disputes away from lengthy and very costly court proceedings. The law arrived just in time to help reduce some of the pressures that have come to bear on court systems, Bou Ghannam tells Executive.

Public Procurement Law

A law deserving of greater and lasting attention is the public procurement law. Public Procurement Law 244/2021, which Parliament had passed in June 2021 without much further debate, was published on July 19 of that year in The Official Gazette. Campaigners for this law had been pushing for it from two sides, efficiency and transparency, with arguments that a better procurement mechanism will have benefits in combating corruption and at the same time open possibilities for better serving citizens while unleashing cost advantages. The law’s guiding principles are being described as: integration, transparency, competitiveness, efficiency, accountability, integrity, professionalism, sustainability, and local development. The law went into effect on July 29, 2022.

Legal expert Jinan Tfaily comments that the new procurement law expands the oversight of the Public Procurement Authority to include all procurement operations carried out by the state, its institutions, councils, funds, departments, independent administrative bodies, municipalities, and their federations, and courts that enjoy particular budgets, security and military wires and their units, and purchases of public utilities operating from private companies for the benefit of the state, up to the purchases carried out by the Banque du Liban ( with the exception of printing and issuing currency). She notes that several amendments of Law 244 were approved within the 2022 Budget Law, such as amendments pertaining to contracts with hospitals, medical centers, and laboratories, to vetting of municipal servants and contractors, and to appointments of receiving committees. These and other clarifications are expected to assist (especially smaller) municipalities in adhering to Law 244 to the best effect.