National Oil Company draft law is dangerous and premature

Timor-Leste's State Secretariat for Natural Resources recently opened a brief public consultation on a decree-law to create PETRONATIL, a state-owned petroleum company.  They hope that the Council of Ministers will approve it on 30 November, and the proposed 2011 General State Budget allocates two million dollars to get it started.  La'o Hamutuk has many serious concerns about this proposed legislation, which we described in our submission, available for download here.
Our submission discusses the following:

• National oil companies are dangerous, and we should learn from failures as well as successes.
• The public consultation process is inadequate.
• PETRONATIL should be established by Parliamentary law, not decree-law.
• PETRONATIL should serve the people of Timor-Leste.
• This Decree-Law must be written clearly.
• PETRONATIL should follow the rules for state agencies.
• PETRONATIL needs to be transparent and accountable.
• PETRONATIL should be designed to prevent corruption.
• PETRONATIL should not be given more power than it needs.
• PETRONATIL’s profits must be paid into the Petroleum Fund, not reinvested in the company.
• PETRONATIL should not be empowered to borrow or issue bonds.

We also made a submission on the Institute for Petroleum and Geology (IPG) draft law, recommending that it be established as a department of the State Secretariat for Natural Resources, rather than an autonomous agency with wide-ranging powers and little accountability.

Click here for the draft laws and background information.