Business
Liberia: Cautious Optimisim About Oil Prospects
“A lot of times people take advantage of the fact that whatever revenue is generated from the oil industry is not being decentralized,” he says. “So you have few getting richer and the rest of the country suffers.”
Liberia’s state-owned oil company, NOCAL, is at the heart of debate.
Global Witness, an international watchdog group, has recommended outfit be disbanded.
“The biggest concern probably is a series of bribes that were paid,” says Jonathan Gant, the organization’s Liberia policy adviser. “The Liberian government has referred to them as lobbying fees, but they were monies paid mostly by the national company itself to the Liberian legislature to facilitate the passage of different oil contracts. We don’t have any evidence that this sort of behavior has occurred in the last several years, but until there are obvious reforms, both of the law by which the contracts are administered and of these financial processes, it’s pretty unclear to see why the same thing couldn’t happen again.”
Current laws make NOCAL both a commercial, profit-driven enterprise, as well as the regulatory body in charge of the oil sector.
Director of the Center for Transparency and Accountability in Monrovia, Thomas Nah, says the situation constitutes a serious conflict of interest.
“If you look at some of the laws, they are both player and referee at the same time,” says Nah. “They are playing and refereeing at the same time because they are supposed to be participating and, at the same time, they are supposed to be regulating and then, to some extent, involved in policy-making.”
For their part, NOCAL officials say urgently-needed reforms to existing oil legislation are under way and that the company supports greater transparency with regards to how revenue is to be managed.
