The Lebanese Oil and Gas Initiative-LOGI attended last Tuesday January 29th the press conference organized by the Lebanese Transparency Association (LTA), Transparency International’s chapter in Lebanon. LTA’s board member, Mr. Mosbah Mazjoub announced the results of the 2018 “Corruption Perception Index” (CPI). The index ranks countries from across the globe according to the degree of perception of corruption in their public sectors on a score of 0 to 100, where 0 is highly corrupt and 100 is clean. For those following closely Lebanon’s uphill battle against corruption, it came as no surprise that its score remained for the 6th year in a row 28/100.

Even though the terms “Transparency, Accountability, and Anti-corruption, have been used repeatedly over the past four years in political speeches, the Lebanese citizens still perceive the Lebanese public sector systems as highly corrupt. The fact that the Lebanese government and parliament have been increasing their efforts to enhance transparency, accountability and reduce corruption, seems not to have contributed to improving the public perception of corruption in Lebanon.

So how does Transparency International’s assessment of Lebanon reflect on the development of the nascent oil and gas sector?

To begin with, such a score indicates that the legal framework needed to support transparency and reduce the risk of corruption is either absent or dysfunctional.

The past 2 years have witnessed the ratification of three very relevant transparency laws, namely the Right to Access Information, the Whistleblower Protection Law (Law No. 83 of 10/10/2018) and the Law on Strengthening Transparency in the Petroleum Sector (Law No. 84 of 10/10/2018). So the laws are not absent. But are they functional?

The Right to Access Information law has been used by the LPA to publish sector specific information and contracts. Nevertheless information needs to be disclosed automatically and not upon request.

Both the Whistle Blower law and Enhancing Transparency law, requiring no implementing decrees, remain to be used. The first statements done by the newly selected Minister of Energy and Water, HE Nada Boustany, addressed the issue of fighting corruption and leading a more transparent path in the management of Lebanon’s energy sector. Following up on these very brave commitments, we expect the minister to put the transparency laws into good use by publishing the details and contract of the Rosneft deal. Such an act would definitely contribute to improving Lebanon’s perception of corruption.

Last year the cabinet of ministers approved the exploration and production plans as submitted by the consortium of oil companies that were awarded the licenses to drill. Thus, the subcontracting process was unleashed. As per Transparency International, public procurement in countries that have high CPIs, are vehicles for promoting massive corruption. Since increased corruption in the subcontracting phases ultimately leads to a country’s huge economic losses, Lebanon’s opportunities to gain economically from the oil and gas sector, as it stands today, are pretty slim. Lebanon’s high CPI score indicates that, political gains, patronage and clientelism will be the name of the game in the very critical subcontracting phase. Right or wrong, the Lebanese government has to exhibit better oversight and follow stricter procurement processes in order to counteract the indications of the CPI. LOGI will be releasing next week a policy brief with concrete recommendation around enhancing transparency in the subcontracting process in Lebanon’s oil and gas sector.

What would at the moment complement the government and parliament’s efforts to reduce the perception of corruption, is a commitment to implement public consultations processes. Countries such as Mongolia and Ukraine have successfully managed during the past 10 years to develop and ratify laws that mandate public consultations, with the aim of enhancing trust and reducing perception of corruption.  LOGI will be releasing in March a policy brief around public consultations and stakeholder engagements.

Finally and with the intention of ending our blog by highlighting the silver lining contouring a so far depressing state of affairs, we strongly applaud and commend the government’s intentions to implement the Extractive Industry Transparency Initiative-EITI. Proper implementation of the EITI in Lebanon and opening up the dialogue through the multi stakeholder discussions among companies, government and civil society will for sure reduce the perception of corruption and increase trust. LOGI is quite optimistic that 2019 will witness the unfolding and implementation of the EITI Standard in Lebanon.

Yes, the CPI’s 2018 scores for Lebanon are embarrassing, we have to admit. But what would be even more embarrassing is if we stand with arms folded helplessly watching corruption eating away at Lebanon one bite at a time.

For further information around governance related issues in Lebanon’s oil and gas sector, do not hesitate to visit our publications section on LOGI’s website.

* Image extracted from Transparency International's official website.