EXPOSED, Cover-up in Oil Sector
By Jale Richard
A report released by an independent research body has revealed that noncompliance to petroleum management laws has worsened, leading to deliberate cover-ups of information, and increasing risks of corruption in the sector.
The report titled Compliance with Petroleum Industry Transparency and Accountability Rules in South Sudan released by the Suud Institute, on Tuesday discovered that despite the existence of strong petroleum transparency and accountability legal rules, noncompliance with them has worsened in the last three years.
It reviewed the existing transparency and accountability rules to understand the extent to which these have been implemented.
According to the report, only 26 percent of the information required by the petroleum laws has been published in 2019, compared to 42 percent in 2016.
“This seriously violates the petroleum transparency and accountability rules and poses high corruption and reputational risks,” said the report.
The report that lack of transparency was partly caused by non-publication of the Ministry of Petroleum’s annual marketing reports, which is supposed to disclose key petroleum information in accordance with petroleum laws.
According to the report, Petroleum revenue information disclosed was 92 per cent in 2016 compared to 44 per cent in 2019, while regulatory or policy information disclosed was 75 per cent compared to 50 per cent in 2019. Contracts transparency has also dropped by more than half: 13 per cent in 2016 and 6 percent in 2019.
The research report said that deliberate cover-up of public information creates mistrust.
“Lack of transparency and accountability denies political leaders political legitimacy and companies a social license to operate among the petroleum producing communities,” it said.
“Operating in darkness prepares an enabling environment for corruption to thrive, which can lead to looting of resources by individuals, resulting in poor economic development and political instability,” the report added.
According to the report, “failure to disclose information as required by the laws depicts the government as a violator of public interest.”
The report recommended the parliament to establish an independent body to account, coordinate, and publish petroleum information as provided for in the Petroleum Act 2012, Petroleum Revenue Management Act 2013, and Public Financial Management and Accountability Act 2011.
It also suggested the Ministry of Petroleum, Ministry of Finance and Planning, Bank of South Sudan, Nilepet, and Audit Chamber to publish information required by the petroleum laws.
“The government should empower the media to publish and analyze petroleum information to promote greater transparency and accountability,” it says.
“Implementation and compliance with transparency and accountability rules will reduce corruption, minimize conflicts over natural resources, and protect revenues for development, potentially leading to peace and prosperity,” the report added.
The report comes weeks after President Salva Kiir ordered for suspension of petroleum contracts to allow audit of the sector.