Africa's Public Procurement & Entrepreneurship Research Initiative – APPERI


Muammar al-Gaddafi

Libya can’t start afresh by sticking with corrupt contracts

Moving sand dunes, rocks and mountains in Tadr...
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September 11, 2011

The National Transitional Council’s pledge to honour contracts signed by Gaddafi‘s regime stores up trouble for the future.

The crumbling of the Gaddafi regime has intensified discussion of the challenges that lie ahead for Libya. Democracy, pluralism, national reconciliation and religion are all critical issues that will need much work. In my own opinion, though, re-establishment of the rule of law is the most pressing of all issues. Corruption, left unchecked, constitutes a threat to the future security of Libya.

A few years into its existence, the Gaddafi regime began to morph into a criminal enterprise that siphoned off Libya’s wealth either for personal enrichment or to buy friends for the regime both at home and abroad.

Naturally, the government controlled all revenues flowing into the Libyan treasury and maintained a vice-like grip on contracts. Over the years, the percentage “commission” on any given contract grew exponentially and, in many cases, was reported to exceed the actual value of the base contract.

We are unlikely to ever know the full details of the financial wrongdoings that have taken place in Libya over the past 40 years. However, what is undisputable is that Libyan government contracts were the primary vehicles for corruption.

Contracts with foreign companies provided an easy and convenient way of laundering money outside the country. At least part of this money was used by the regime to finance international terrorist activities includingsupporting the IRA, the Lockerbie bombing and endless conflicts in the African continent. Contracts with local acolytes provided an equally easy and convenient way of financing the drugs trade, smuggling and other criminal activities.

Much of the corruption in Libya is institutionalised in long-term contracts signed by the Gaddafi regime with companies all over the world, most notably in Russia, China, Italy, Germany, the UK and the US.

The National Transitional Council has been under tremendous pressure from these countries to publicly state that these contracts will be honoured – which it has done, perhaps because of its dependence on the goodwill of the international community. It seems to have done so without placing any condition or reservation. To renew contracts without removing the embedded fraud, where it exists, is a huge mistake…While they might feel they cannot afford to alienate the very countries that have supported them, short-term expediency cannot trump long-term interests and those interests are serving the needs of the people they work for: the people of Libya who will be in no mood for business as usual…Read more.

INTERVIEW-Libyan council wants oil firms to return fast

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Source: Reuters

September 2, 2011

By John Irish

PARIS, Sept 2 (Reuters) – With infrastructure damage from Libya‘s six-month conflict fairly limited, foreign oil companies should return as fast as possible to restore oil production, the interim administration’s reconstruction minister said on Friday.

In an interview with Reuters during a meeting with donor groups and post-conflict rebuilding experts, Ahmed Jehani said oil would be key to getting the economy running again and foreign contractors were needed for their technical expertise.

“The issue of damage is not much and you can get procurement very fast. This is helped by fact the producing wells are under contract to international firms, if they feel they can deploy their people,” said Jehani.

He could not say how quickly Libya, which has Africa‘s largest oil reserves and boasts top-quality crude, could see its output back at pre-war levels of 1.6 million barrels per day.

“We could go back to normal levels if you have the companies coming back to operate fields and then they can judge,” he said. “The parts under Libyan management we could get up very fast.” Read more.

Infographic: Which Countries Are Most Reliant on Libya for Oil?

Good Politics

As unrest continues to mount and conflict rages on in Libya, questions surrounding the North African nation’s oil exports remain in the air. The international Energy Agency said in March 2011 that the country’s oil production has “slowed to a trickle” as the fighting has prompted international companies to halt their operations and close ports.

What does this mean for the countries that receive shares of Libya’s typical daily output? Here’s a breakdown of which ones depend most on the turbulent but oil-rich nation.

Source: Good

‘Libya’s oil deals need to be transparent’

Pie chart of world oil reserves by region
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Sitting on Africa‘s largest oil reserves, one can expect foreign oil companies to be beating a path to its door clamouring for contracts. But campaigners urged the National Transitional Council (NTC) to refrain from any new oil concessions until an elected government is in place to avoid perceptions of a Libyan “oil grab”.

“Any deals at this time could raise concerns within Libya that international support for the NTC is driven by a desire for access to oil rather than for the benefit of the Libyan people,” said campaigning group Global Witness. “The NTC is likely to have to honour Gaddafi-era contracts in order to get oil revenues flowing. But no new deals for the exploration or exploitation of oilfields should be considered until an elected government can review existing rules and laws to ensure robust transparency and accountability.” Read more.

Lobbyists line up to new Libyan government

united states currency eye- IMG_7364_web
Image by kevindean via Flickr

26 August, 2011, 07:31

It’s no surprise that America is quick to put itself in the picture of the whole ordeal in Libya as the United States isn’t exactly a known isolationist nation.

Aside from involving itself in the politics of the country during the current revolution, American PR companies have begun a bidding war to offer their services to a nation with a new government and new faces.

Corporations, companies and politicians in America aligned themselves to Colonel Gaddafi only up until late. As the revolt escalated, however, ties were cut and contracts broken. Now with the Transitional National Council being considered the governing body of Libya by parts of the world, the US included, American entities want to invest in an all-new Libya.

Washington-based lobbyists Patton Boggs have already inked a deal with Libya in the days since the coup heated up, and are charging the new government upwards of $50,000 a month for consulting fees. In a new report by the National Journal, it’s revealed that strategists at The Harbour Group have also lined up to hop on the Libyan bandwagon, and while they are offering their services for free right now, they could be setting the groundwork for a long-lasting, big-money contractRead more.

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