Lebanon: The Oil & Gas Week, May 27, 2013 - Middle East Strategic Perspectives

Lebanon – Local politics:

Meeting constitutional deadlines is a challenging task in Lebanon, particularly in times of crisis. Less than a month before the expiration of the Parliament’s mandate in mid-June, the question of whether or not to hold the elections on time has not been settled yet, raising country-risk in a country run by a caretaker cabinet since 22/03 and struggling to contain the effects of the Syrian conflict. Failure to reach consensus over a new electoral law has revived chances to hold elections under the existing “1960 law”, officially rejected by most political parties. Disagreements over the electoral law have pushed some MPs and political parties to consider another option, the constitutionality of which is strongly questioned: extending the Parliament’s term. Even here opinions diverged. There are those who prefer a “technical” extension, not exceeding six months (the March 14 alliance). Others prefer a two-year extension (including Speaker Nabih Berri’s Amal Movement and Walid Joumblat’s PSP). The Free Patriotic Movement, and President Michel Slaiman are against any extension of the Parliament’s term. Caretaker Minister of State and Zahle MP Nicolas Fattoush presented a draft law on 22/05 to extend the Parliament’s term for two years. What is revealing in the text annexed to the draft law [Link in Arabic] submitted by Fattoush is the series of justifications provided to extend the Parliament’s mandate. Among these is the “presence of a confirmed oil wealth, which is not to the liking of certain regional and foreign countries that prefer a state of instability in order to prevent Lebanon from exploiting its wealth. Fattoush referred to Libya as a “good example” of what is meant by that. Years before the confirmation of their presence in commercial quantities, potential oil and gas resources have already become an integral part of the local political debate, providing a new basis for cross-party bickering and justification for distorting democratic procedures.

France/UK – EITI:

France and the UK jointly announced on 22/05 their intention to join the Extractive Industries Transparency Initiative (EITI), which requires disclosure of government revenues (taxes, royalties and other fees) from extractive sectors. EITI might not be legally binding, but the measure is indicative of a growing trend in Europe and the US to combat corrupt practices in extractive industries. Both have indeed adopted or agreed to adopt tough measures requiring their companies, or companies listed on their stock exchange, to disclose payments to governments around the world in exchange for oil, gas and mining activities. The UK, which is chairing the G8, has indicated that transparency in extractive industries will be one of the major themes at the Group’s summit in June. In Lebanon, the UK is also active in encouraging and training local civil society to be prepared to address the issue of transparency in the oil and gas sector. In a country where corrupt practices are hardly an exception, EU and US companies might be at a disadvantage compared to companies from other parts of the world with looser transparency rules. This might explain why the UK, through its embassy and some of its most prominent NGOs working in this field, has spearheaded efforts to address the issue of transparency in the oil and gas sector in Lebanon. A member of the Petroleum Administration has recently indicated, on condition of anonymity, that the question of joining EITI is being considered.

***

Our previous weekly reports:

Lebanon: The Oil & Gas Week, May 20, 2013

Lebanon: The Oil & Gas Week, May 13, 2013

[Oil & Gas Updates]: Weekly Roundup, May 6, 2013

[Oil & Gas Updates]: Weekly Roundup, April 29, 2013

[Oil & Gas Updates]: Weekly Roundup, April 22, 2013

[Oil & Gas Updates]: Weekly Roundup, April 15, 2013

[Oil & Gas Updates]: Weekly Roundup, April 8, 2013

[Oil & Gas Updates]: Weekly Roundup, April 1st, 2013

[Oil & Gas Updates]: Weekly Roundup, March 25, 2013

[Oil & Gas Updates]: Weekly Roundup, March 18, 2013