Transparency: lost in revolt

Libyan rebels not making oil revenues transparent

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 More than one million barrels of rebel-controlled crude oilleft the Libyan city of Tobruk on a tanker headed to Asia in early April. Libya’s National Transitional Council (NTC), the Libyan rebel’s interim government, received $129 million for the sale, according to the newly appointed head of Libya’s National Oil Corporation (LNOC), Wahid Bugaighis.

This was the council’s first, and at the time of writing, only sale of oil as the nation’s civil war drags on. The deal reached between the rebel government and Qatar stipulates that Qatar will market rebel-controlled oil abroad; the first shipment was bought by the Swiss company Vitol, one of the world’s largest independent energy traders.

But weeks after the shipment left from the rebel-held city, home to the only functioning export terminal in the oppositions’ hands, only afew knew where, how and when the money was (or will be) spent. The lack of transparency surrounding the $129 million deal leaves room for exactly the sort of corruption endemic within Libyan leader Colonel Muammar Qadhafi’s regime that the rebels seek to overthrow.

Roughly three weeks after the start of the Libyan uprising, the Arabian Gulf Oil Company, or Agoco, owned entirely by Libya’s National Oil Company, announced its support for the rebels. Under the umbrella of the NTC, the company is supplying oil to the interim government so as to carry out its deal with Qatar.

“For me, as of now, there is no transparency,” says Abdeljalil Mayouf, who manages the information department at Agoco. “Normally we have a big financing department, and there are many sections within this finance department that deal with our money, our budget. But as of now, I don’t have any information about this money.”

At an April 10 meeting in the de facto rebel capital of Benghazi, Ali Tarhouni, the opposition government’s finance minister, told Executive that the millions of dollars had not yet been allocated.

“But most of it is going to be for food and medicine and fuel — benzene, diesel, derivatives to fuel the power stations, fuel for automobiles,” he said.

Tarhouni then said a bank account had been set up in Qatar to hold the cash, but when asked about who has access to the account, Tarhouni walked out of the interview, citing that he was too busy to talk. He refused multiple subsequent requests for a follow-up interview and provided no additional reasoning for his refusal to comment.

LNOC’s Bugaighis says the money received in exchange for the oil shipment has already been spent. For weeks previous Qatar had already been shipping gasoline and supplies to rebel-controlled Libya, with the NTC claiming that payments for such items were deferred until a later date. Others suggest, however, that rebel’s $129 million in oil revenue went to cover some of the cost of these shipments. “It was spent in two days,” said Bugaighis. “Take a cargo of gasoline – 25,000 metric tons; that’s $75 million, so the money doesn’t last long.” He did not provide specific details about the allocation, however.

A right to information

Peter Bouckaert of Human Rights Watch (HRW) attributes one of the reasons for the lack of transparency to the council’s fear that Qadhafi will pressure foreign countries and companies not to deal with the transitional government. It’s an assessment reflected by Bugaighis. “We don’t need transparency,” Bugaighis said. “We don’t need to tell Qadhafi what we are doing everyday. And if the world knows or not — it really doesn’t change much.”

But many people argue that transparency is vital; authorities and civilians alike are aware of the potential for corruption. “We are afraid of transparency all the time,” Agoco’s  Mayouf said. “In the third world, there is none.”


For more than four decades, hydrocarbon revenues have fallendeep into the pockets of Qadhafi and his inner circle. Many Libyans feelembittered that their country’s natural wealth has not been invested in itspeople, says analyst Shadi Hamid of the Brookings Institute in Doha. He notesthat this gap between the people and the government was one of the factors thatinitially contributed to the uprising.

“Libya’s people have a right to information about a majornational resource,” HRW said in an April 5 report. The organization insiststhat transparency is crucial now, and should not be postponed for the future.

“The vast sums of revenue involved, if misappropriated,could lead to the entrenchment of a new, corrupt elite with the funds availableto put in place a new era of repression,” said Bouckaert. The human rights watchdog urges countries and companies entering into agreements with the temporary government to insist on public transparency, independent auditing and accounting for funds.

Some people in, or close to, the council are not concerned about the lack of transparency, saying that systems to prevent corruption are put in place. “We know the money is going in and out,” Bugaighis said.“Everything is accounted for in terms of invoices. Everything is documented.”  He claimed that no more than 10 people are involved in overseeing the transactions, and that multiple signatures are needed on any transaction made. When Qadhafi is ousted, these documents will be presented to the authorities in Libya and to those in Qatar, he said.

But the NTC vows that when, or if, a temporary government is created the council itself will dissolve. If the current authorities in eastern Libya are not in power following Qadhafi’s ouster, it is unclear how these authorities will be held accountable for any transactions made under their temporary supervision.

Vulnerable to abuse

“It is exactly at this moment of institutional weakness that the danger of ‘capture’ of oil revenues by ruthless elements bent on self-enrichment is greatest,” HRW’s Bouckaert says.

Some argue that “institutional weakness” goes well beyond the lack of transparency. Before NTC members were thrust to the forefront of national and international politics, they were professors, judges, doctors and lawyers. As there has been a lack of participatory state institutions and independent civil society in Libya for more than four decades, some are concerned that the lack of experience among the new governing members could be a threat in the years to come.

Still, amongst Libyans in rebel-liberated areas, there generally seems to be faith in the National Council and its ability to handle transactions responsibly; Bouckaert says the council has committed itself to ensuring that oil sales will be transparent in the future and that the oil revenues would be for the general benefit of Libyans. LNOC’s Bugaighis and Mayouf of Agoco said that, at the time of writing, no oil was being produced in Eastern Libya due to attacks on oil fields by Qadhafi forces. One field, called Messla, was bombarded in attacks on April 4, Mayouf said, and electricity to the nearby field of Sarir was cut off. But according to energy analyst and petroleum engineer Sherif el-Helwa, 20,000 barrels could be extracted daily as a result of natural flow from oil wells.

“I’m optimistic that [the National Council] will be honest, but I don’t know,” said Agoco’s Mayouf. “I have confidence in the young people. They are paying with their lives to liberate Libya. And it wouldn’t be fair if people who are opportunistic take advantage of the situation. This is the future of Libya.”