Leaked Gaddafi-era documents expose the need for urgent oil reforms
Global Witness has obtained Gaddafi-era documents that detail the mismanagement of millions of dollars of Libyan oil revenues and highlight murky practices by Libya's state-owned National Oil Company (NOC).
The revelations, contained in a report published in its entirety today by Global Witness titled “An Annual Report by the Control Board for 2010” (the “Report”), and in a series of letters written by NOC employees, outline complaints against the NOC that include:
- The systematic under-pricing of oil that led to the loss of millions in oil revenues.
- Selling lower quality crude oil than advertised to ExxonMobil, resulting in a loss of nearly $4m for ExxonMobil.
- Providing large discounts to select foreign companies such as the Norwegian fertilizer company Yara International ASA (Yara).
Separately, Yara has announced that the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (Økokrim) has launched charges against them in connection with the company's negotiations in Libya. The investigations are ongoing. Yara has declined to comment on whether these investigations related to Yara receiving large discounts in gas prices from the NOC. According to Yara, they “must await the result of the investigation before making any comment on what was paid, for what and to whom.”
“Murky dealings within Libya’s National Oil Company, and the systematic mismanagement of the country’s oil wealth have effectively denied millions of dollars to the people of Libya,” said Giulio Carini, a campaigner at Global Witness. “The case for reform of the country’s oil sector could not be stronger or more urgent. Transparency and accountability in the management of oil is crucial to the future success of Libya as a nation,” he continued.
Global Witness is calling on the current Libyan interim Government to publish all existing and future oil contracts, and work with international audit organisations to improve accounting and auditing practice within the NOC so that revenues can be accurately measured and reported on. Following elections, Libya’s new government should ensure oil sector transparency is written into Libya's new constitution and establish a review of all contracts – under parliamentary oversight – revising any that are corrupt or were poorly negotiated.
When asked to comment, long-time Libyan anti-corruption activist Abdelhamid El Jadi said that these documents reinforced his own findings into Gaddafi’s extensive history of mismanagement of the oil sector and his knowledge of shoddy practices within the NOC. El Jadi also praised one of the Report’s contributors, Najwa El Beshti, a former head of oil contracts at the NOC, who faced an assassination attempt and numerous threats as a result of her work to report mismanagement in the sector.
“Beyond the need for reforms of Libya’s oil sector, it is hard to think of a more obvious contemporary example than Libya to demonstrate the need for new international standards of transparency and accountability for the extractive industries,” said Carini. “Unfortunately the international push to require such transparency, both through the Dodd-Frank Act in the United States and a parallel effort currently being formulated in Europe, is being seriously undermined through the actions of the international oil industry, which appears keen to sustain an opaque environment within which to operate,” he concluded.
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A blueprint for reform: lessons from past mismanagement and murky practice in Libya’s oil sector is available here.
Notes to editors:
- Global Witness has published the ‘Report’ on our website: The report is in Arabic (Part 1) (Part 2), and (Part 3) with the relevant sections translated into English.
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