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Matt Nash

More on gas and transparency

Take the money and run (Image courtesy of centerofintention.com)

Yesterday, I published a piece about transparency in Lebanon’s emerging oil and gas sector. One source, Laury Haytayan from the Revenue Watch Institute (RWI), replied to some questions via email after the article was published. However, I think she made some interesting points worth reading, so here they are in Q-and-A format:

NOW: How would you rate the overall transparency of the oil and gas sector in Lebanon so far?
Haytayan: For now, the process is good and not only RWI but many experts in the field have qualified the process as transparent.  The level of trust between all Lebanese political parties is very low which enforces a high level of transparency in the gas process to rule out any accusations from any party to the party that is in charge of the gas and oil portfolio. If the transparency in the process is maintained, the mistrust between Lebanese politicians will be in favor of the future of the country!

NOW: What are a few important milestones coming up in the oil and gas sector where transparency will be essential (i.e., licensing round, contracts, etc)?
Haytayan: RWI believes is in the comprehensive approach to governance which means it is important to keep in perspective the whole value chain from the moment oil is extracted to disbursement of funds for economic development. Therefore, the important milestones are from the first decision to extract in context of the geopolitical implications and possible impact that this decision will have in the country and the region, but also the important milestones are in the licensing and contracting (how to negotiate good contracts and get a good deal), revenue collection (transparent process) and management of revenues (establishing savings and [a sovereign wealth fund]), which will insure that any revenues collected from oil and gas will be properly allocated to long term growth and development.

NOW: How can civil society and NGOs play a role if the government is not transparent as we embark on licensing and, eventually, awarding contracts?
Haytayan: The more Civil Society is informed, better it will be able to advocate for a more transparent and accountable process, building the capacity and technical expertise is crucial especially the sector is not developed yet. NGOs will need to advocate for open bidding, for publishing contracts, for the need to make the fiscal terms known. NGOs should make it clear to the government that the people of Lebanon have the right to know each step of the process and any citizen that needs to get information; he/she would be able to do so, on the website of the ministry of energy.

Therefore, the first thing that CSOs and NGOs can do is to create a Civil Monitoring System to oversee the functioning of the ministry and the government in the gas sector. But first and foremost, these CSOs and NGOs have to build their capacities and understand how the sector functions from the day the country decides to extract to the day the revenues are allocated in sustainable development. The day “the deprived” regions stop being deprived; it is the day when Lebanese will know that the revenues from gas were allocated in the right place.

Take the money and run (Image courtesy of centerofintention.com)

The level of trust between all Lebanese political parties is very low which enforces a high level of transparency in the gas process to rule out any accusations from any party to the party that is in charge of the gas and oil portfolio.