Petroleum Sector Corruption OGMC/ PREM/ OPCS BBL Seminar Series Presenters: Charles McPherson, COCPO Stephen MacSearraigh, Consultant Discussants: Clive Armstrong, COCDR Erika Jorgensen, OPCCE Outline of Presentation Paradox of Plenty Ominous correlations Corruption typology Relevant actors Oil value chain Remedies and responses Extractive Industries Transparency Initiative (EITI)
Paradox of Plenty Widespread resource wealth in developing countries Potential for good has not been realised Resource rich developing countries have experienced: Low per capita growth Slow progress on human development Social and political instability and violence The Record in Oil-Rich Africa
Oil-rich countries include: Nigeria, Angola, Equatorial Guinea, Cameroon, Gabon, ROC, Sudan, Chad Significant resources: 4MMBD or 5% of world production High dependency:70% of government revenues Below average per capita Africa income Below average scores on infant mortality, life expectancy, literacy Instability and violence: Nigeria, Angola, Chad, Sudan, ROC Awash in Oil, Mired in Poverty
Oil Fuels War and Corruption Role of Governance Good governance is critical. Good governance has multiple features:
Clear and stable laws and regulations Rule of law High level of capacity and skills in government Fiscal monetary and budget discipline Open dialogue between government and civil society Public sector/private sector balance Transparency Control of corruption Resource-rich developing countries do not score well on governance, or corruption Ominous Correlations: Oil and Governance Norway Kuwait
Russia Gabon Mexico Venezuela United Kingdom Malaysia Ecuador Algeria Colombia Nigeria
Indonesia Chad Saudi Arabia Azerbaijan Iran Angola Cameroon Weak governance 155 Countries Strong governance Ominous Correlations: Oil and Corruption Transparency International 2000 Corruption Perceptions Index: Country 1 2
89 90 Armenia Tanzania Vietnam Uzbekistan Uganda Mozambique Kenya Russia Cameroon Angola Indonesia Azerbaijan Ukraine Yugoslavia Nigeria
2.5 2.5 2.5 2.4 2.3 2.2 2.1 2.1 2.0 1.7 1.7 1.5 1.5 1.3 1.2 Corruption as a Development Issue Major threat to development
Undermines ability of governments to function properly Distorts markets Stifles private sector Encourages non-productive activity Reduces investment, incomes and growth A Widely Recognized Challenge: Corruption Concerns in Developing Countries A Widely Recognized Challenge: International Community Initiatives US FCPA (1977) Inter-American Convention on Corruption (1966) OECD Convention Against Bribery (1997) UN Convention Against Corruption (2003)
EITI (2002) Special Features of the Petroleum Sector Strategic significance (Commanding Heights) Large margins Large transaction sizes Heavily regulated Corruption Typology Policy corruption (sector policies, laws, contracts, taxes) Enforcement corruption (approvals, access, fiscal administration, price controls, HSE regulations) Procurement corruption (kickbacks, local content abuse)
Grand corruption (Niger Delta bunkering, diversion of funds, activities outside the sector) Relevant Actors Governments (host and home) Industry (IOCs, NOCs and INOCs) Big Men Banks Host Governments: My Money to Spend My Money to Spend, says Deby. Economist, January 6, 2001 Home Governments: With Friends Like These
Big Men: Following the Oil Money Washington Post, September 25, 2000 The Oil Value Chain Exploration and production (licensing, laws, contracts, taxes, approvals procurement) Trading and transport (liftings, invoicing, deliveries, theft, access to pipelines/terminals) Refining and marketing (black markets, smuggling, theft, product adulteration) Corporate (accounting, reporting, transparency)
Beyond the Oil Sector: Contributions to the Paradox of Plenty Erosion of governance Weakens institutional capacity Undermines popular support/consensus Remedies and Responses Improved sector governance Broader context of reform Stakeholder engagement (civil society) Transparency (EITI) Extractive Industries Transparency Initiative (EITI): A Specific Response
Transparency has many dimensions: Revenues Expenditures Policies Laws and regulations Administration Applies to all sectors EITI focuses on EI resource revenue
transparency as a manageable, meaningful starting point. EITI Principles and Objectives Ensure that resource revenues are properly accounted for and contribute to sustainable development and poverty reduction Provide guidelines to stakeholders on auditing, reporting and disseminating information on resource payments and revenues Facilitate TA in support of EITI implementation EITI Implementation Criteria Credible, independent audit of payments made and revenues received Publication and widespread dissemination of
the audit results in easily accessed format Comprehensive coverage, i.e., all companies including NOCs Engagement of civil society in the process Public, financially sustainable, time-bound plan of implementation Petroleum Sector Corruption Thank you! Questions or Comments? Open for Discussion
SET UP A NEW VOCAB SHEET. LABEL IT "UNIT #8 VOCAB LOG" AT THE TOP. ... A large level of inflation HURTS the economy because it REDUCES the PURCHASING POWER of MONEY and may AFFECT DECISIONS people make about PRODUCTION...
Name Date Hour Notes: Unit 1--Protein (1) What is a protein? Type of Biomolecule Nitrogen Based Molecule (2) Elements Carbon (C) Hydrogen (H) Oxygen (O) Nitrogen (N) Some contain Sulfur (S) (3) Monomer Monomer: Basic unit or Smallest unit of...
- Contracting as a strategy under the cost part of CQO. Discuss what members are using for their contract needs as it relates to these tools. ... Utilize Spend Essentials, look for large swings in spend that may bump you...
Dr John Trantalis Common Fractures and Joint injuries Common Paediatric Lower Limb Fractures Avulsion fractures - tibial tuberosity and ACL Physeal fractures around the knee and ankle Femur # in children under 2 years - think child abuse!!!
"Global village" enunciated by Marshall McLuhan, as early as the 1960's can be applied to digital media; ... Mr. Narendra Modi had more than 16 million Facebook likes (second most for any politician in the world) ... over 110,000 newspapers...
Smudging is a purification ceremony and the four medicines are sage, cedar, tobacco and sweetgrass these four medicines are made from mother Earth . The ceremony is to cleans the mind, body and spirit , it can take place at...
Ready to download the document? Go ahead and hit continue!