FRENTE REVOLUCIONÁRIA DO TIMOR-LESTE INDEPENDENTE
23 June 2008
Timor-Leste petroleum law opens door to corruption
Timor-Leste's new petroleum law has been drawn up in secrecy and haste and opens the door to corruption and mismanagement of the country's gas and oil revenues, FRETILIN said today.
“Greater public consultation and parliamentary scrutiny of this law is critically important to the future of our nation,” said FRETILIN MP and former Minister for Natural Resources, Minerals and Energy Policy, Jose Teixeira.
Xanana Gusmão's Parliamentary Majority Alliance de facto government (known by its Portuguese acronym AMP) enacted its National Petroleum Authority Decree Law on June 18.
The National Petroleum Authority (NPA) will replace the Timor Sea Designated Authority (TSDA) for the Joint Petroleum Development Area shared between Timor Leste and Australia. The NPA will also be responsible for regulating all petroleum exploration, production, processing and sales activities offshore and onshore in Timor-Leste.
“This law should not have been passed by decree of the Council of Ministers meeting in secret but should have been sent to parliament for scrutiny and approval,” Teixeira said.
“Also, the public was only given five working days to comment on the draft law, making a mockery of public consultation,” he said.
He said the draft law violates basic principles of the constitution and existing petroleum law and weakens parliamentary control over the petroleum sector and petroleum fund spending.
"Whenever the former FRETILIN government enacted any laws in the petroleum sector, we held wide public consultation and took time to receive and examine all public input. To us it was critically important for all stakeholders, especially our people and civil society, to understand fully and give their views on the laws we proposed to enact.”
Timor-Leste’s petroleum fund created by the former FRETILIN government now totals almost US$3 billion in savings, and was rated the third most transparent sovereign wealth fund by the Peterson Institute for International Economics, second only to those of Norway and New Zealand.
“Petroleum is vital to the future of our nation. It has also has caused untold problems of corruption and environmental damage, and led to social and political conflict, in many countries,” Teixeira said.
“Meaningful public consultation that allows all stakeholders to contribute to enacting good law and reach consensus is the only way to avoid such conflict arising in Timor Leste.
“It is clear that many national and international stakeholders are disappointed and concerned with the secrecy and unnecessary haste with which this draft law has been managed.
“Parliament's own Natural Resources, Agriculture and Environment Committee did not even see a draft of the law. For the past six months, FRETILIN members have been asking the de facto Minister responsible for Natural Resources and/or his Secretary of State to appear before the Committee to outline developments in the petroleum sector, without any response.
“The de facto government's own press statements mention agreements with foreign oil companies to provide technical assistance to draft laws regarding the national optimisation objectives for Timor Leste's downstream petroleum sector.
“However, these agreements are shrouded in unnecessary secrecy, arousing suspicion amongst civil society and other stakeholders in the petroleum sector.”
On 10 April 2008 President Jose Ramos Horta called on the Gusmão de facto government to work with FRETILIN to gain national consensus on management of petroleum resources and revenues.
In a media release on 13 June 2008 La´o Hamutuk, a leading civil society group intimately involved with the development of the petroleum sector in Timor-Leste from its inception, was highly critical of the de facto AMP government's secret handling of the NPA law.
In its submission to the de facto government
La´o Hamutuk said: “One of the 2002-2007 Government's proudest achievements was transcending party differences to achieve a unanimous parliamentary vote for the Petroleum Fund Act. This consensus model should be emulated, not circumvented. Involvement of elected representatives from both the governing parties, and the opposition is essential to provide stability for the future.'
Jose Teixeira said: “In 2006, the then FRETILIN government received wide national and international acclaim for the unprecedented highly transparent manner in which Timor-Leste's inaugural offshore exploration licensing round was managed. The Bid Tender Independent Evaluation Commission's report was published and the minister's decision to award the successful bidders their areas and the full reasons were published. Then the production sharing contracts were published.
“Only the highest levels of transparency can ensure a corruption-free environment.
"Our highly transparent approach has been replaced by one of secrecy and obscurity. Vital questions are now being frequently and widely asked about conflict of interest and potential for collusion and unfair advantage.”
For more information contact:
Jose Teixeira +670 728 7080 (Dili, Timor-Leste)