The Mozambican non-governmental organisation (NGO) the Centre for Public Integrity (CIP) thinks that the power imbalance between the government and multinationals constitutes a possible source of corruption in the country’s oil and gas sectors. “Although it was not possible to prove the influence of the ‘lobbies’ in the approval of the legislation, we consider that it cannot be a mere coincidence that the multinationals are the party which most benefits from the exploitation of hydrocarbons,” the NGO records in an analysis entitled “Corruption risk assessment in the oil and gas value chain in Mozambique”, consulted by Lusa on Thursday (December 1). According to the document, financial power, technical and human capacity put oil companies in a superior position vis-à-vis experts and institutions of the Mozambican state, creating asymmetries that may favour corruption. “These situations translate into pressure exerted by the parties interested in the hydrocarbon business,” the text reads. The CIP notes that oil sector legislation has been approved and changed with a speed which points to an influence of outside operators on the state. “Although the legislation itself is not a risk factor for corruption, the rapid way in which it has been approved and amended, associated with omissions and inaccuracies, creates conditions for practices which encourage corruption,” the analysis finds. Another risk factor, the CIP continues, is the “monopoly” exercised by the Mozambican government over stages of the hydrocarbon production value chain, as both legislator and operator. Among the risks identified is “the monopolist centralization of all the processes of the oil and gas industry, by the Government, as legislator, inspector and interested party”, the CIP contends. Each of the areas covered by government institutions could potentially generate countless opportunities for corruption, especially decision-making in a non-transparent way, it continues. The CIP understands that the centralization of the functions related to the oil and gas sector in the executive has also contributed to the weakening of the institutions charged with controlling legality and accountability. The study also points to the state’s lack of capacity to assess the quantity and quality of production by multinationals for a reliable calculation of revenues as another area of concern in terms of transparency. The alleged lack of information and public debate on the strategic objectives, nature and object of the state’s business arm in hydrocarbon projects is also criticised. “The lack of transparency includes the criteria for establishing partnerships, in cases of setting up subsidiaries, and partnerships between the national private sector and foreign companies,” the analysis reads. The document also warns of “the risk of corruption occurring” as a result of the difficulty of inspecting and monitoring the local content requirements incumbent on multinationals. “In the same vein, the absence of details and specificities in the concession contracts in relation to local content makes it up to the investor to establish and fix specific mechanisms,” the analysis concludes. Source: Lusa
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