After four decades of tyrannical rule by Col. Muammar el-Qaddafi, financed largely by our country’s oil wealth, Libyans have taken steps this summer toward a true democracy. Last month, we got to vote in legislative elections, and this month we experienced the first peaceful transfer of power, from the Transitional National Council to a new national assembly, in our country’s modern history.
While we are grateful to the Western countries that helped us topple Colonel Qaddafi last year, something perverse is happening in those countries now. Oil industry lobbyists are using their influence in Washington and Brussels to try to undermine transparency measures that could help prevent future tyrants from emerging. That must not be allowed to happen.
When Colonel Qaddafi was in power, I worked for Libya’s state-owned National Oil Corporation, in a position that allowed me to observe corruption firsthand. I helped produce audits that detailed the mismanagement of millions of dollars of oil revenues, including the systematic underpricing of oil and the discounting of prices for select foreign companies. I initiated investigations into why millions of barrels of crude oil went missing from an oil field in 2008; presumably, the proceeds had gone into the pockets of the elite.
The regime never explained why it requested the audits, which were never released to the public. Feeling that I had to do something, I naïvely wrote 50 letters denouncing corruption, including three to Colonel Qaddafi’s powerful son Seif al-Islam. The result? I was demoted and suspended without pay. Intelligence agents interrogated me. I received death threats: after an unmarked car slammed into my car, intelligence agents visited me and told me, “Next time could be fatal.”
Today, our allegations of corruption are being examined, but the investigations continue to face obstacles. Earlier this year, based on my reports and those of others, Interpol, at the request of the Libyan government, sought the arrest of the former oil minister, Shukri Ghanem. But on April 29, before he could be detained for questioning, he was found drowned in the Danube River, near his home in Vienna. The Austrian authorities have said they found no indications of foul play, but an inquiry is continuing.
If we are to transform Libya, we must not only investigate the past but also reform the whole relationship between the energy industry and our government. We need to ensure that bidding is fair and open, that deals are transparent and aboveboard and that revenues are used properly. Public disclosure and legislative oversight of contracts and payments are crucial.
We cannot meet these goals without help from abroad. Colonel Qaddafi’s rule depended on the collusion of powerful foreign allies who would turn a blind eye to blatant corruption deals involving international oil companies and his regime.
America can help prevent such corruption from happening again.
The Dodd-Frank overhaul of Wall Street regulations, which President Obama signed into law in July 2010, included a provision, Section 1504, that requires American and foreign companies that are registered with the Securities and Exchange Commission to disclose — country by country and project by project — how much they pay governments around the world for access to their oil, natural gas and minerals. (Federal law already prohibits companies from bribing foreign officials to get or retain business.)
In December 2010, the S.E.C. issued proposed regulations to put Section 1504 into effect. The commission has yet to finalize the rules but is scheduled to take up the matter on Wednesday, at a hearing in Washington. Some of the world’s largest oil and gas companies — along with industry groups like the American Petroleum Institute — are trying to water down the regulations or delay them from taking effect. Some are proposing to exempt resource-extracting companies from having to comply if a foreign government objects, an idea I think of as a “tyrant’s veto.” The industry also claims that complying with the tough disclosure requirements will be costly and may place companies at a competitive disadvantage — but these arguments have been thoroughly discredited, making it hard not to conclude that many would simply prefer to carry on operating in secret.
A similar fight is playing out in Europe. The German government is resisting requirements for project-level reporting, and the European Council, which comprises leaders of the European Union’s member states, has called for a weaker form of disclosure. However, some members of the European Parliament continue to champion strong disclosure requirements.
Having helped Libya to overthrow a tyrant, the United States and the European Union can now help win the peace — by committing themselves to strong transparency standards for energy companies. In Libya, we don’t want our oil resources to bolster new tyrants, and the world shouldn’t either. When tyrants control energy supplies and gun down their own citizens, they invite only rebellion, military intervention and oil-supply shocks. We want a stable, prosperous country under the rule of law, in which citizens benefit from their natural resources and hold their leaders to account.
I urge the S.E.C., as well as European regulators, to resist the lobbying from the oil, gas and mineral industries and to issue strong rules consistent with the spirit of Section 1504. By making the oil companies answerable to the public — in America, Europe and everywhere they do business — we can turn oil into a force for transparent and open commerce rather than corruption and repression.
Najwa al-Beshti is a former head of contracts at the state-owned National Oil Corporation of Libya.