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NGO Warns that “Mozambique’s Oil Sector is Vulnerable to Corruption”

NGO Warns that “Mozambique’s Oil Sector is Vulnerable to Corruption”

The Mozambican non-governmental organisation (NGO) Centro de Integridade Pública (CIP) considers that the imbalance of forces between the Government and multinationals constitutes a risk of corruption in the country’s oil and gas sectors.

“Although it has not been possible to prove the magnitude of lobbying in the approval of legislation, we believe that it cannot be a mere coincidence that multinationals are the most benefited party in hydrocarbon exploration,” the NGO said in an analysis entitled “Assessment of corruption risks in the oil and gas value chain in Mozambique”, accessed on Thursday 1 December by Lusa.

a d v e r t i s e m e n t

According to the document, the financial power and technical and human capacity place oil companies in a position of superiority over experts and institutions of the Mozambican state, creating asymmetries that may favour acts of corruption.

“These situations translate into pressure exerted by parties interested in the hydrocarbon business,” it said.

The CIP notes that legislation in the oil sector has been approved and amended with a speed that indicates an influence of operators over the State.

“Although legislation in 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 that favour corruption,” the analysis says.

“Among the identified risks is the monopolistic centralisation of all processes in the oil and gas industry by the Government, as legislator, inspector and stakeholder”

Another risk factor, it continues, is the “monopoly” exercised by the Mozambican government over stages of the hydrocarbon production value chain, by being both legislator and operator.

Among the risks identified “is the monopolistic centralisation of all processes in the oil and gas industry рby the Government, as legislator, inspector and stakeholder,” the CIP emphasises.

Each of the areas covered by government institutions can generate numerous opportunities for corruption, especially decision making in a non-transparent way, the NGO continues.

CIP believes that the centralisation of functions linked to the oil and gas sector in the Executive branch has also been contributing to the weakening of institutions for monitoring legality and accountability.

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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 public information and 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,” due to the difficulty in overseeing and monitoring requirements for allocating to Mozambican companies part of the share of business with multinationals – the so-called local content.

“Along the same lines, the lack of details and specificities in concession contracts in relation to local content means that it is up to the investor to establish and set specific mechanisms,” the analysis noted.

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