09 December 2013, Monrovia – A report by the watchdog group, Global Witness on the draft oil legislation for Liberia has raised concerns that there may not be insufficient political will within the Liberian Government to bring about the sweeping changes the sector needs.
The report says while the controversial oil draft legislation contains some progressive and positive provisions, including requirements for the public disclosure of the ultimate beneficial owners of companies and strong transparency provisions, there are areas that need to be improved for the country to fully realize the potential benefits of its emerging oil sector.
The House of Representatives is expected to review the draft Petroleum Exploration and Production Act 2013 (Petroleum Act) and the draft National Oil Company of Liberia Act 2013 (NOCAL Act) in early 2014.
‘Strong transparency, oversight key
GW concluded that the success of the laws in developing a petroleum sector that supports the country’s economic development will be in part determined by the safeguards within the Revenue Management Bill which has yet to be developed.
“Strong transparency, oversight and accountability provisions will be needed to ensure that any revenue from a potential oil find in Liberia can be effectively harnessed. The Petroleum and NOCAL Acts contain some progressive and innovative clauses on beneficial ownership and transparency of information. However, they fail to recognise and accordingly protect the land rights of all of those who may be affected by petroleum operations and do not require international competitive bidding in all cases.”
The Liberian Legislature has the opportunity to revise these acts and ensure that sufficient safeguards are put in place to enable any potential income from Liberian’s oil sector, in the absence of other sources of finance being available, to contribute to real development benefits.
The GW report examines the strengths and weaknesses of the draft acts to support the Liberian House of Representatives (the House) in its ongoing review. “There have already been significant weaknesses with the legislative and consultation processes for these acts. This raises concerns that there may be insufficient political will within the Liberian Government to bring about the sweeping changes the sector needs.”