Friday, June 7, 2013

Ensure oil money put into good use, Putrajaya told

Ensure oil money put into good use, Putrajaya told

By Zurairi AR
June 07, 2013
Malaysian Insider 
File photo of a Petronas petrol station in Putrajaya. The DAP wants Petronas to be made accountable to Parliament. — Reuters picKUALA LUMPUR, June 7 — DAP assemblyman Yeo Bee Yin called for a number of legislative reform today to ensure greater transparency and accountability in managing Malaysia’s oil wealth.
This comes as Revenue Watch Institute’s (RWI) report on government disclosure in oil, gas and minerals management in 58 resource-rich countries released in April saw Malaysia scoring three per cent lower than in 2010, performing poorly in all three criteria touching on matter of accountability like reporting practices and safeguards and quality control.

“It is time for Malaysia to move to greater transparency and accountability in governing the wealth of oil lest we fall into the category ‘curse of oil’ or ‘Dutch Disease’,” said Yeo in a statement here, referring to negative consequences arising from large increases in a country’s income.

“With better disclosure policies and Petronas made accountable to Parliament, we can make sure that the oil money are put in good use for the benefits of all rakyat as well as to invest for the future generation,” the Damansara Utama state assemblyman added.

Yeo challenged the federal government to implement the Freedom of Information (FOI) Act, which will allow the public to seek information from government ministries, departments and government-linked companies (GLCs) such as Petronas.
After blasting Datuk Paul Low last week, Yeo (picture) reminded the minister in charge of integrity and corruption that he himself has praised Selangor and Penang’s implementation of the FOI in the 2012 Transparency International Corruption Perception Index (TI-CPI) released December last year.

The DAP social media strategist also wanted Putrajaya to ratify the Extractive Industries Transparency Initiative (EITI), an international standard endorsed by the World Bank to increase transparency over payments from oil companies to governments.

She also suggested an amendment to the Petroleum Development Act 1974 to make state oil firm Petronas’ operations and business decisions accountable to Parliament.

Last week, Low had reportedly said that Malaysia’s weak result was because Petronas’ disclosures of overseas agreements make up a “big item” in the index, pointing out that the firm must respect the host government’s requests for non-disclosure while carrying out its operations abroad.

Responding to the claims, Petronas insisted that it has kept to international standards in disclosing its overseas operations, in the same standards of other multinational oil and gas company such as ExxonMobil and Shell.

Yeo today claimed that Petronas’ open disagreement confirmed her earlier rebuttal that the poor RWI ranking has little to do with disclosure of overseas operations but operation and business activities within Malaysia.

According to her, the poor ranking was instead due to the lack of comprehensive disclosure policies in Malaysia legal framework in requiring Petronas to disclose certain information of their operations and business decisions within Malaysia such as the award of contracts, exploration licence, subsidies and royalty transfers.

Among Southeast Asia’s main oil and gas producers, Malaysia was ranked 34th in the latest global index that measures the quality of governance in oil, gas and mining sectors of 58 countries, tailing neighbours Indonesia, the Philippines and even poverty-plagued Timor Leste.

Malaysia scored 46 composite points out of 100, on par with West African countries such as Gabon, Guinea and Sierra Leone and just ahead of China, which scored 43 points and ranked 36th out of the 58 countries.

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