Lebanon: Progress towards Extractive Industries Transparency Initiative

Lebanon is well on its way towards joining the Extractive Industries Transparency Initiative (EITI), a major step towards ensuring that the profits from Lebanon’s oil and gas reserves contribute to the country’s economic development. Westminster Foundation for Democracy is working to support the Public Works and Energy Committee oversight role to make sure this becomes a reality.

The Lebanese Parliament is currently debating a draft petroleum transparency law. This reaffirms the commitment to join the EITI made by the Lebanese Council of Ministers in January 2017, and demonstrates the impact that the initiative is already having.

Since the discovery of 96 trillion cubic feet of gas and 865 million barrels of oil in the early 2000s, membership of the EITI has been on the agenda. The announcement that Lebanon will join the EITI has, therefore, renewed optimism that the emerging oil and gas sectors will be effectively overseen by the Parliament, and that citizens will benefit from the expected income.

In reaction to the announcement, Mohamad Kabbani, the Chair of the Public Works and Energy Committee, said “this is part of our campaign and efforts towards achieving transparency of the oil and gas sector in Lebanon. We worked hard to push the government to join this important initiative and the Committee has issued a specific recommendation on this.”

While Lebanon’s oil and gas extraction has not yet come on stream, the Public Works and Energy Committee recognised the importance of establishing a regulatory framework and mechanisms to deliver transparency in the sector before contracts with oil companies are signed. This will be crucial if Lebanon is to avoid the ‘resource curse’ phenomenon that has blighted many other oil-rich nations.

Since the discovery of 96 trillion cubic feet of gas and 86 million barrels of oil membership of EITI has been on the agenda.

To this end, WFD has been providing technical assistance to the Public Works and Energy Committee, to support its work on new legislation and overseeing Government energy policy. Building on this, the Committee is taking a leading a role in championing parliamentary oversight of the energy sector. Mr Kabbani explained, “We are also supporting the adoption of a bill entitled Transparency of Oil and Gas, so that we can ensure full transparency of this promising sector”.

In October 2016, Joseph Maalouf, MP and member of the committee, released a draft transparency bill, and in February 2017, WFD supported the Committee in reviewing a draft bill on oil and gas taxation. In the coming months, the Committee will be working with relevant ministries on drafting a proposal to establish a Sovereign Wealth Fund.

Through these activities, the Public Works and Energy Committee has continued to exert pressure on the Government to enforce a regulatory framework demanding responsible oil and gas exploration, ensuring that oil and gas companies adhere to international standards. After more than two years, the Committee had a break-through in autumn 2016, when the Government approved two decrees that had delayed the development of an offshore oil and gas sector since 2013.

Joining the EITI had been another issue that had faced blockages. Through supporting the initiative of the Public Works and Energy Committee to act as an effective forum for the discussion and promotion of energy policies and proposals, WFD has played an important role in assisting the Committee in its mission to push for EITI membership.

Looking forward, WFD will continue to assist the Public Works and Energy Committee in overseeing the adherence to EITI standards, playing a continuing role in oversight of the sector, and enforcing the legal framework on energy transparency once contracts are signed and the oil and gas come on stream.

(Top:photo: WFD organised workshop in Beirut with the Public Works and Energy Committee)

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