Gold extends longest losing streak in four years
BY A majority vote, the House passed a law last night empowering a committee of technocrats to assess bids for offshore hydrocarbons licences and to negotiate with interested companies, effectively shutting out the Commerce Minister.
The bill, based on an amendment tabled by the opposition, garnered 32 votes from opposition MPs. All 16 deputies from ruling AKEL voted against.
The President will likely to refuse to sign the law, in which case he will send it back to parliament, after which it could end up in the Supreme Court. Meanwhile current procedures would still apply until a court decision was reached.
Former Commerce Minister Antonis Michaelides said the shenanigans would make Cyprus a laughing stock, saying not only would it delay the natural gas process but it would put a question mark over Cyprus’ credibility. He also wondered how the opposition would feel about having their own minister shut out if they come to power next year with the same law on the statute books.
Under the previous law (Hydrocarbons Law of 2007), the Commerce Minister had the authority to negotiate with companies and to present his or her recommendations to the Cabinet, which has the final say. Whereas the actual assessment of bids was previously carried out by an advisory committee, the latter’s recommendations were not binding on the Commerce Minister.
That’s the key difference with the current law. Now, a ‘technical committee’ will assess bids and conduct negotiations with companies, and their recommendations are binding on the commerce minister who must submit them to the Cabinet.
And although the Cabinet retains the final decision and the right to reject a proposal or send it back for further processing, at the end of the day whatever material it reviews will come from the technical committee, not from the Commerce Minister.
No exploration or exploitation licenses will be awarded unless a contract is approved by the Cabinet and signed by the Commerce Minister.
Under the new law, the technical committee comprises the permanent secretaries of the ministries of commerce, finance and agriculture, the director of the Energy Service, the Attorney-general, the director of the Geological Survey Department, and officials from the Auditor-general’s office and the Treasury.
The idea behind the legislation, according to its authors, is to involve as many people as possible in decision-making, rendering more transparent the whole process of sele cting bidders and awarding gas licenses.
Under an amendment drafted by the Greens, the new law also declassifies any information relating to workplace safety (on drilling rigs) and to environmental protection. The particular clause will not be retroactive, so as not to apply to the contract which the Republic has concluded with Noble Energy.
Ruling AKEL, opposed to the DISY-inspired legislation, yesterday sought to introduce another amendment, which proposed the establishment of an inter-ministerial committee comprising the ministers of commerce, finance, the interior and agriculture. The technical committee would have to report to this inter-ministerial committee, which would be the competent body for bringing any documents to the Cabinet. Since AKEL lacked the numbers or the support in parliament, their amendment was beaten back.
Voicing his opposition during the debate in the House, AKEL MP Yiannos Lamaris said crucial political decisions should not be left to technocrats.
“Who can better safeguard national security, the government or technocrats?” he mused.
The passing of the bill represents a legislative coup of sorts against the AKEL administration. By empowering a committee of technocrats and by sidelining the responsible minister, opposition parties believe they can wield more control over the process of assessing bids and awarding gas concessions.
The Republic’s notice inviting applications for hydrocarbon exploration and exploitation licences was published in the official journal of the EU not a fortnight ago.
Among others, the notice stated that the applications must be submitted to the “Honourable Minister, Ministry of Commerce, Industry and Tourism.” They also stated that the second licensing round is governed by the existing legal framework – the laws that applied prior to yesterday’s passing of the bill but which are now null and void.
Former Minister Michaelides said the politicians’ shenanigans could make Cyprus a laughing stock abroad.
“The foreign companies will now be wondering whom to contact – the Commerce Minister or the technical committee? We will presumably need to edit the notice in the EU journal to reflect the changes. Other than delaying the whole process, it also poses a question mark over our credibility as a partner,” Michaelides told the Mail.
“You can’t tailor laws to suit you depending on whether you like a certain minister or not,” he added, alluding to the much-publicised spat between Commerce Minister Praxoulla Antoniadou and opposition MPs.
The row erupted after Antoniadou moved late last year to strip Energy Director Solon Kassinis of decision-making powers. Antoniadou was subsequently subjected to a hazing by opposition deputies at the House Commerce Committee. Among other things, lawmakers accused her of acting in Turkey’s interests – an allusion to a past proposal by Antoniadou for energy cooperation between Cyprus and Turkey. Antoniadou responded by refusing to attend further committee meetings unless deputies issued an apology. Shortly later, deputies began fleshing out the legislation aimed at blocking her out of hydrocarbons licensing.
“What happens next year after the elections if a different party comes to power? Will they change the law yet again, since as it stands now the ruling party won’t be able to control energy matters through their political appointees? Is this a sign of a serious state?” Michaelides commented.
“There is something truly disturbing about having a group of technocrats calling the shots, while a minister, who outranks them, sits on the sidelines,” he said.
By Elias Hazou
Published on February 24, 2012
|||Minister shut out of gas talks