Beirut- a tale of two conferences

Last week, I attended two conferences, both related to the oil industry. The similarities between the two were clear ; both relating to the extractive industries, held in Beirut, a focus on the MENA region, but the differences were astounding and revealed a huge amount to me about potential pitfalls in the campaign for good governance of the extractive industries.

The first, the Lebanon International Oil and Gas Summit (LIOG) brought together participants from over 45 countries, to discuss the future of the Lebanese oil industry. I must admit now, that the main reason I attended was purely out of coincidence of being in Beirut at the same time; I was granted a press pass, so I avoided the $2,100 sign up fee.

The overwhelming theme of talks were, in effect, advertisements – first the government, announcing how stable an investment opportunity it provided, and how responsibly they were going to use their offshore gas revenues, then companies, advertising their skills in the field of, you guessed it, offshore gas development.

Nothing was groundbreaking, until one presentation which took everyone by surprise. Speakers did not have to announce their topic of talk until they got on stage, so a presentation on “Corruption in Lebanon” came as a surprise to us all. Malek al-Takieddine, a Lebanese lawyer from Al-Jad legal practice, opened with “So, as we all know, there’s no corruption in Lebanon…”

This was intended as a humorous opening, and I, along with a few journalists, laughed as the conference organisers and government representatives looked increasingly nervous. The rest of the audience, however, burst into a round of applause. Without irony.

This set the tone for the rest of the presentation. References to Lebanon’s place in Transparency International’s Corruption Perception Index (128th out of 174 ) were met with stony faces, and references to corruption seeping into the industry already were ignored.

But the most revealing reaction was to mentions of transparency measures in the industry. A slide outlining the Extractive Industries Transparency Initiative (EITI) was met with blank faces; talk of the Dodd Frank legislation in the US, and the corresponding EU legislation to introduce project by project reporting, also brought no signs of recognition.

Could it be that none of these people, all in fairly senior positions in the oil industry, had heard of the EITI, the most prominent global transparency standard, which includes 16 member countries, a further 21 candidate countries, and 70 supporting companies from the industry?

Apparently. Chatting during the coffee break to other attendees brought up, again, some surprising reactions.

“You work on transparency? That’s great! We’re all for transparency” said a representative from a mid size company, whose country is a new addition to the EITI. But had he heard of the EITI? No.

Others were a little more patronising.

“Transparency? Wonderful, dear. Now, is this your own initiative, or are there others working on this idea with you?” (Yes – a whole global movement, actually.)

There were more easily spooked people too.

“Ah, you’re a researcher? That’s…good. Oh, please excuse me, I have to, er, speak to someone over there” they said, as they ran in the opposite direction, giving me the strange feeling that I had the power to make grown men run away from me.

Or the more pragmatic ones.

“Transparency? In the oil industry? Good one! Good luck with that!” (Er, thanks?)

Despite many of the representatives there working for the companies who made up the EITI supporting companies, it was clear that knowledge of the EITI hadn’t spread fully throughout the company.

Thinking about it, it’s not actually that surprising. At the governance and transparency conferences and workshops, any industry representation is from the Corporate Social Responsibility (CSR) section, or equivalent. It is the job of these people to engage with civil society, activists and government to show that their company feels a responsibility to society, so of course they are well versed in transparency and governance initiatives.

The attendees of this conference, however, had only one aim- to do business in Lebanon, via making connections at the conference or getting the ear of a government insider. Their area of expertise was making business connections, not presenting the soft, cuddly side of oil companies to the public – so apparently, transparency and governance wasn’t in their mandate.

But shouldn’t it be? Surely knowing about these transparency initiatives and the move for better governance and anti-corruption was of prime importance to the people almost on the front line between companies and governments? If anyone, these were the people who might face the possibility of having to offer underhand payments or favours – not the CSR representatives.

It became clear to me throughout the two days that these people were a key demographic that were being missed out in the transparency lobby, and with this conclusion I headed off to the other workshop. This was run by Publish What You Pay, a global network of civil society organisations, all working on extractive industries transparency, and brought together 25 of their coalition members from the MENA region, most from their already well-established Yemen and Iraq coalitions, as well as participants from their outreach countries in the region, namely Tunisia, Algeria, Libya, Lebanon and Egypt.

When I explained to some participants about the conference I had been at the previous day, some were confused. “Did they pay you to go? Do oil companies pay you?”

No, and I explained that I went simply to learn about what the ‘industry’ was talking about, and to see how it all worked – the premise being, how are we supposed to act to change an industry if we don’t understand how it works in the first place?

This logic didn’t translate so well, and I got the impression that none of the participants had tried to engage with or talk to people from within industry.

This was clarified when it got to my session, on understanding oil contracts. As a hands on exercise, I had printed out copies of the Iraqi 2009 model Technical Service Contract, and set up a number of ‘paper chases’ for participants to follow, using the contracts to find answers to questions. Although the group of participants were from a range of countries, and not just Iraq, it was the only one I could find in the public domain.

One exercise – finding out whether, according to these contracts, companies have any obligation to support training of Iraqi nationals – was, I thought, giving the Iraqi participants a bit of a headstart. I assumed that they, who had a well established PWYP coalition would have already come across the $5 million per year that the signatory company (or consortia) from each contract has to pay into a Training, Technology and Scholarship fund, managed by the government.

I was wrong. The discovery of this fund came as news to everyone in the room, including the Iraqis. They immediately had lots of questions about it, and luckily for me we had a lawyer in the room who I had asked to come along, as he had worked on the contracts and who could answer all of their more technical queries. They were so keen to find out more, in fact, that he ended up giving them the contact details of his Iraqi colleague, and calling her in Baghdad so they could speak then and there.

On one hand, this was great – I had come up with something during my workshop that they hadn’t come across before. Success! On the other – why hadn’t they come across this before? If they’re pushing for transparency of payments, then surely they need to know what they should be looking out for? As it turns out, nobody I have spoken to knows who manages this Training, Technology and Scholarship fund, and by rough estimates, it must have by now between $100-150 million.

The lawyers working on these contracts – such as the one I had asked to come along – know these contracts inside out, and know where to find the potential pitfalls both on the government and the company side. They have amassed a huge amount of knowledge that could be invaluable to the work that civil society is doing to fight for transparency.

But it seems to me that the two worlds just aren’t colliding, with the exception of CSR representatives from industry taking part in multi-stakeholder groups. Unfortunately, the knowledge they are gaining from this appears to be staying within these specific sections of their companies.

On the one side, you have the industry. Well paid, knowledgeable people with years of experience, who have scientific backgrounds, who work in one of the world’s most unpopular industries.

Yes, they work for the industry, but that by no means rules out the possibility that they don’t share the goals of the civil society activists and organisations such as ourselves here at OpenOil, wanting to ensure that citizens of resource rich countries can also benefit from their natural resources. They, themselves, have benefited from the oil industry in making their living from it – who is to say that they don’t want to give something back?

On the other – well meaning activists, some with very little experience of the industry but who have decided (and good on them!) to fight for better management of their country’s resources. They are supported by coalitions such as PWYP, and they have to fight for funding against other NGOs and non profit organisations. From what I saw last week, they see their fight as being against the industry – against companies, against the people working for the companies, against anyone who is on the industry payroll.

CSR reps aside, where’s the overlap? We’re all working in the same industry, aren’t we? There is huge potential for knowledge share, with mutual benefits to both sides – for example, lawyers or industry representatives giving talks at workshops such as the PWYP one last week, outlining perhaps their experiences in relevant countries, unusual payments to be looking out for. Equally, civil society running workshops for industry (a lunch hour in an IOC office, for example) inviting those who do not normally get the opportunity, to learn about the transparency movement from them – EITI, new legislation that could affect them, what they should do if they come across corrupt practices.

I’d guess that a lot of people working in the oil industry would welcome the opportunity to use the knowledge and experience they’ve gained to help civil society and the movement for transparency– but we need to ask them first.

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