KENYAN ANTICORRUPTION CRUSADE DESERVES INDUSTRY SUPPORT

Jan. 3, 2003
Although it has no hydrocarbon production and only one small refinery, Kenya deserves the oil and gas industry's keen attention.

Bob Tippee

Although it has no hydrocarbon production and only one small refinery, Kenya deserves the oil and gas industry's keen attention.

The East African country's new president, Mwai Kibaki, said when sworn into office on Dec. 30 that his government's top priority would be ending corruption.

Mammoth challenge, this. Kibaki calls corruption "a way of life in Kenya."

He replaces Daniel Toroitich arap Moi, who ruled with a heavy hand for 24 years but could not, under Kenya's constitution, run for office again.

Kibaki, a 71-year-old former vice-president and finance minister, trounced Moi's chosen successor, Uhuru Kenyatta.

Just before the election, the Kenyan branch of Transparency International, a Berlin anticorruption group, issued a report listing a dozen forms of systematic corruption in the country.

Officials and their cronies, the report said, expropriate and sell goods imported duty-free for famine relief, undermining domestic agriculture and commerce.

They siphon funds from government projects, profit from illicit use of public assets, and divert state money to bogus contractors, among other things.

The report ominously noted that Kenya's high court routinely dismisses embezzlement cases on technicalities.

Corruption anywhere hurts the oil and gas industry.

The legal relationships companies form with governments in order to explore for and produce oil and gas derive their political legitimacy from an implicit promise: that a fair portion of consequent wealth benefits the people of host countries?and not just an elite few.

When governments are corrupt, as far too many of them are, the promise goes unfulfilled.

The industry should cheer Kibaki's promise to fight corruption and help him with the effort. And it should evangelize the principle to the oil-producing countries of Africa.

Countries like Nigeria and Angola bustle with exploration and development of lavish petroleum resources yet languish in widespread poverty.

The biggest but far from only reason for this abhorrent paradox is what happens to oil money, honorably paid under altogether legal contracts, when it passes into official but unaccountable hands.

The oil and gas industry should assign to fighting corruption worldwide the same priority Kibaki says he's giving it in Kenya.

(Online Jan. 3, 2003; author's e-mail: [email protected])