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A new draft law seeks to safeguard future revenues

Though Lebanon’s oil and gas sector is effectively on hold, it doesn’t mean policymakers have stopped showing up to work. Lawmaking is not a high-speed process, even with a functional parliament and cabinet, and when it comes to building the legal framework governing the nascent sector, more time to draft bills and build consensus could arguably be a positive thing.

The most recently proposed oil and gas legislation is an anti-corruption bill introduced by Joseph Maalouf, a member of  parliament’s committee on energy, in April 2015. The MP has introduced the draft law aiming to mitigate illicit activity in Lebanon’s yet-to-emerge oil and gas sector and tells Executive that it has been fast tracked into committee by Parliament Speaker Nabih Berri, a promising sign for the emerging sector. The minutes from a September 8 committee meeting however do not indicate whether the draft law was discussed. In any case, the parliament has not legislated this year and is unlikely to do so given the current political impasse and vacant presidency since May 2014.

Anti-corruption law

At a macro level, Maalouf’s law examines where corrupt activities may occur along the full lifecycle of an oil and gas project. He tells Executive that, “We took the process from the 3D mapping [seismic surveying] all the way to pre-qualifications, qualifications, and [tendering] the contracts. Within the contracts [we look at] each step that will happen and where the decision points are. We said that at this point there is possibility for corruption – any place where there is a decision point which someone could influence, we went into the details.” The law also covers downstream activities and the decommissioning of future wells, not only the first steps in an oil and gas project.

“I believe this is the one sector where we’re starting from scratch,” Maalouf says. “You can build foolproof systems easier when they’re already dismantled. Unfortunately, a lot of the corruption that exists in Lebanon has been ingrained in our social and political reality for decades.” The law itself prescribes penalties for a number of infractions including prohibiting ministry of energy staff – that includes the Lebanese Petroleum Administration (LPA) – from soliciting payments and gifts or accepting any type of consulting work or partnership in oil and gas activities while in office. The law provides the General Prosecutor with the authority to investigate and prosecute the law’s stipulated crimes, some of which may be punishable by three years jail time or a fine equivalent to the financial value of the infraction, or both.

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