Oil Politics: No Renegotiation But Reform-Has Breakthrough Been Achieved?

Undoubtingly, the past few weeks on Capitol Hill were rift with oil controversies. The target was the Sirleaf’s administration and the contentions were that oil contracts violated the new petroleum laws of Liberia and there is a need to reform the NOCAL Act to separate regulation from oil revenues collection.

The Liberian Senate pulled out of the Conference Committee established to bring legislative pressure on President Sirleaf to renegotiate ten oil blocks. The House of Representatives took offense and drew the battle line between the Senate and themselves. This situation threatened national governance as both Houses cannot smoothly function without the other.

In some communities, Liberians hailed the House of Representatives of being the true representatives of the people while decrying the Liberian Senate for their insensitivity to crucial economic issues. In other communities, the Senate is given accolades for what is described as respect for international instruments while the House of Representatives attracted suspicions and described as being insensitive to international instruments and laws.

But the Government of Liberia, according to top administration sources, understood the concerns of the House of Representatives; but yet found it difficult to play along with the renegotiation deal. For over two weeks, behind the scenes discussions had been going on featuring top administration negotiators.

Cardinal to the discussions were the legal implications of renegotiating contracts already ratified by the National Legislature, signed by the President of the Republic of Liberia and considered a legal international instrument that already have review provisions and timelines. Also considered in those discussions were abrogation that could have legal consequences and actions that could drag Liberia before the international court of arbitration and jeopardizing Liberia’s evolving oil industry and credibility in the investment world.

Questions being asked by the public are whether these contracts were signed before or after the passing of the 2002 Petroleum Laws upon which the House based its argument. These questions are essential to determine whether the House action is justified or whether the 52rd National Legislature significantly ignored the Petroleum Laws during their scrutiny and ratification of the contracts. Records show that the ten contracts were ratified by the 52nd Legislature which means that the 2002 Petroleum Laws were in force.

Informed sources claimed that oil negotiation started as early as President Doe’s Administration but broke down on the basis of 70% for foreign oil firms and 30% for the Liberian Government. The rejection of the offer by President Doe is said to have paved the road to Liberia’s civil war. The Taylor’s Government is said to have also been made the same offer by American oil companies which was said to have been rejected by him on the basis that the 70%/30% offer was unfair to the people of Liberia. This, according to sources, was responsible for Taylor’s fate today. How true are these claims? Sources say they are the kind of claims that never get verified officially.

The contracts in question began with Oranto during the Interim Transitional Government of Liberia but took shape during the first term of President Sirleaf. It is claimed by administration sources that the ten contracts followed due processes and submitted to the 52nd Legislature for scrutiny and ratification. According to them, due diligence of those contracts were done and having been satisfied by the 52nd Legislature, they were ratified and sent to the President for signature.

The call for renegotiation was sparked off when members of the 53rd Legislature discovered what they considered a violation of certain aspects of the new petroleum laws which emphasized Liberian participation among others. They claimed that what is not legally done is not done at all. Their reliance for renegotiation is said to be based on international laws which would take cognizance of the laws of Liberia.

But what are the actions of the 53nd Legislature speaking to Liberians? Is it prudent for the 53rd Legislature to question the decision of its predecessor? Does it mean that they overlooked the Petroleum laws of Liberia during their due diligence and ratification of those concessions? If so, what were the reasons for such costly neglect? Is it legal for the 53rd Legislature to call for renegotiation; or should such an action come from the Supreme Court based on a petition filed before it?

The call for renegotiation poses a moral problem for the National Legislature. It suggests that the 52nd Legislature lacked the capacity to conduct due diligence or simply ignored the petroleum laws of Liberia. It suggests that the Executive Inter-ministerial Committees may have over-sighted provisions of the petroleum laws which stood to be recognized by the Concession Committees of both Houses.

If there are grave errors identified, legal experts maintained that there are review provisions and timelines contained in the agreements to follow. At such review periods, those omissions could be negotiated. This, according to a diplomat, would be the most honorable thing that would save Liberia from international embarrassment and litigations before the international court of arbitration.

Sources have revealed that Members of the 53rd Legislature have reached a compromise in the best interest of the Republic. It has been accepted that renegotiation of contracts is not possible, says a Capitol Building source. Nevertheless, there are possibilities for reforms. The NOCAL structure would undergo reforms so that issues of regulation of the industry and oil revenues can be properly shaped to eliminate over tasking and confidence problems.

The current atmosphere on Capitol Hill appears to be calmed with less tension and less politics on oil renegotiation. It appears more certain by the day that strained relations between the Liberian Senate and the House of Representatives have slimmed if not evaporated entirely. It is expected that after these revelations and neared imbroglio, the National Legislature would do due diligence to concession agreements before ratification.