Oilies urged to back anti-corruption program

THE Australian petroleum industry has been urged to back the Extractive Industries Transparency Initiative, an corruption-fighting scheme that requires resources companies to disclose all payments they make to governments in developing countries.
Oilies urged to back anti-corruption program Oilies urged to back anti-corruption program Oilies urged to back anti-corruption program Oilies urged to back anti-corruption program Oilies urged to back anti-corruption program

EITI head Ben Mellor told the APPEA conference yesterday that full transparency was needed to help rid developing countries of the poverty, corruption and conflict that tended to be associated with major resources projects.

Too often, oil and gas projects had been a curse rather than a blessing, but the problems caused by resources wealth were not inevitable, Mellor said.

“Oil and mineral wealth, if managed transparently, has the potential to play a major role in the sustainable economic development of countries,” he said.

"But too often weak governance of these revenues has led to poverty, corruption and conflict."

He said in non-transparent, resource-rich countries, revenue was usually captured by a small elite that set up networks of personal patronage to retain their wealth and power.

The initiative was launched by UK Prime Minister, Tony Blair, at the World Summit on Sustainable Development in Johannesburg in 2002. It already has the support of several companies, including Shell, BP, Chevron and ExxonMobil. At last year’s APPEA conference, Woodside announced it had joined EITI.

But questions have been raised over Woodside’s management of its projects in the West African nation of Mauritania.

In August last year the Mauritanian government was ousted in a military coup. The new regime arrested the former energy minister, alleging he had received corrupt payments from foreign companies, including an Australian company.

Then early this year, the regime said amendments to production sharing contracts signed by the previous government with the Woodside-led joint venture were unsatisfactory and illegal.

The government has now accepted the amendments but only after Woodside arranged to pay it $US100 million in a special bonus.

Questions have been raised over the contract amendments and the “special bonus”.

Mellor said corruption could not be beaten unless the “sanctity of contracts” was recognised.

Now it has emerged that Woodside could face an investigation into its activities in Mauritania.

Today’s Australian reports the company is believed to be the subject of a complaint to the Australian Federal Police by Tasmanian Greens senator Christine Milne.

It was not clear whether the complaint related to the special bonus Woodside has paid the current regime or to its dealings with the previous administration, or both.

Woodside told the Australian it knew nothing about a complaint to the Federal Police.

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