24 April 2012

Social Accountability in Oil and Gas Exploration

by Emy Perez

With the Philippine government poised to award oil and gas exploration contracts in July, can Social Accountability frame the engagement?

Mining has dominated the discourse on Extractive Industries in the Philippines for some time now.  The social, environmental, health issues are palpable because the operations are in communities.

It is quite different with oil and gas, that operate mostly offshore, at a distance that communities may hardly see or feel the impact on their lives and their resources.  ‘Out of sight, out of mind’ is a convenient alibi for not engaging communities; it may also be the reason for civil society organizations not participating in the discussions.  Or, simply, that there had not been a platform for participation.

Social Accountability in the Extractive Industry brings the communities to the governance equation, calling for Transparency, Accountability and Participation, throughout the phases of the project - from exploration, decision making, contracting and permitting processes, getting a good deal, collecting and managing  revenues and taxes, to investing in sustainable development projects.

Transparency of information is key; communities need to know the implications of the projects’ activities even as the drillings would be offshore.  Communities that depend on the marine and coastal ecosystem should be consulted at the minimum, and participate and ensure that they get a fair and just share in the revenues from the oil and gas.  The oil and gas industry is more than meeting the energy needs of the country, it means involving people in determining their future, with part of resources coming from their own.

Isn't this, the pre-bid phase, a good time for the Department of Energy to think out of the usual box of governing the sector?  Proactively and constructively engage the communities that are potentially impacted by the projects.
The Philippines is expected to award 15 contracts for oil and gas exploration in July, in its aim to reduce its reliance on oil imports.   The estimate is that the country has reserves of 21 billion barrels of oil and 223 billion cubic feet of natural gas. The new contracts could meet the energy demands that is growing by 4-5 percent per year, according to the Energy Official.  The government, through state-run PNOC-Exploration Corporation holds a 10 percent stake in the Malampaya gas field off Palawan.  The rest is equally owned by Shell Philippines Exploration B.V., a unit of Royal Dutch Shell, and Chevron Malampaya LCC, a unit of the U.S. energy firm.

The author is the network fellow for the social accountability in the extractive industries component of ANSA-EAP

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