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Lebanon needs a win at the EITI global conference

On June 18, Lebanese Energy and Water Minister Nada Boustany is expected to deliver a keynote speech at the Opening ceremony of the EITI Global Conference happening in Paris.

The Extractive Industry Transparency Initiative, is an international transparency standard that governments voluntarily decide to implement to promote better governance of its natural resources. Stakeholders in a country (government, companies, as well as civil society, and in some countries the Parliament acting as an oversight body), produce an EITI report with sector-specific information that can be used to push reform and sound management of the extractive sector.

Having Lebanon present in such a major event is very important. But more significant is ensuring that Lebanon reframes a win during this conference. With Lebanon desperately trying to unlock billions of concessional loans, promised during the CEDRE conference, through trying to implement structural and governance reform prerequisites, it is quite evident that Lebanon indeed desperately needs a win to showcase in front of the international community.

Becoming a member of the EITI would be a win that would surely enhance Lebanon’s image. Our concern lies with maintaining the authenticity of this image.

There are three steps required for Lebanon to be officially declared a candidate country implementing the EITI Standard. The first step, already completed in January 2017, is for the Lebanese government to publically declare its intention to implement the EITI. The second step is to assign a champion and a national EITI coordinator who will be responsible for the unfolding of the EITI process in Lebanon. Both the energy and water minister and the chairman of the Lebanese Petroleum Administration respectively, have been assigned these roles. The third step is for the multi-stakeholder group - MSG - to be formed. Indeed, last March the of energy and water minister called upon civil society to elect their representatives for the EITI Multi Stakeholder group. Civil society is proceeding to the elections in conformity with a code of conduct that has been developed by civil society through a long and inclusive participatory process.

Once the MSG is formed, their primary task would be the development of three documents that will be part of the portfolio to be submitted for consideration for Lebanon’s EITI candidacy status. These three documents are: the terms of reference or by-laws for the MSG, the work plan that basically describes the objectives and activities to be executed by the MSG in order to implement the EITI in Lebanon, and last but definitely not least, the road map for beneficial ownership implementation.

On average, completing the candidacy portfolio requires about 10-12 months to be properly completed as witnessed in countries like Germany and Ukraine

If serious effort is exerted from all of the stakeholders (government, civil society, and extractive oil companies), then Lebanon could be put on an accelerated path to join the EITI. This would require doubling down the efforts to initiate the MSG work. And by June, the Lebanese energy minister could proudly announce at the EITI global conference that the first steps to achieving an EITI candidacy have been completed: Formation of the MSG.

If Lebanon is to be taken seriously by the international community then the following laws and documents need to be ratified and developed:

r Establishment of the Higher Committee for Anti-Corruption: The draft law is pending ratification at the Lebanese Parliament

r Beneficial ownership road map: A road map describing in detail how beneficial ownership is to be implemented to minimize the risks of corruption should be developed. In simpler words, disclosure of who the real owners as well as the economic beneficiaries of the company being contracted and sub-contracted needs to occur. The road map should include steps to be taken to ratify the petroleum registry decree that publishes the beneficial owners of all companies awarded licenses to work in the petroleum sector in Lebanon.

Since article 10.7 in the recently passed “Strengthening Transparency in the Petroleum Sector Law” number 84/2018 clearly mandates that all beneficial owners of subcontracted companies in the Petroleum Sector need to be disclosed, then it is expected and required that the petroleum registry decree includes the names of the owners of all companies subcontracted to work in the petroleum sector in Lebanon. Within the current Lebanese context, few would argue against the high importance of implementing this mandate.

In summary, there is no doubt that Lebanon needs a win.

Our organization, the Lebanese Oil and Gas Initiative, and our partners Kuluna Irada, are non-profits working to ensure the proper development of Lebanon’s oil and gas industry. We are entirely dedicated to helping Lebanon accelerate its EITI nomination, but only through abiding with the strictest of international standards to ensure true transparency and accountability.

The Lebanese Oil and Gas Initiative-LOGI

Kulluna Irada-KI

 
A version of this article appeared in the print edition of The Daily Star on May 09, 2019, on page 6.

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