Libya's Oil Must Now Be Used To Drive Development And Foster Peace
August 24th, 2011
August 24th, 2011
LONDON – With Colonel Gaddafi’s 42 year dictatorship apparently drawing to a close, the Libyan National Transitional Council (NTC) and supporting countries must put measures in place to guard against a Libyan “oil grab” and ensure the Libyan people benefit fully from the exploitation of Libya’s natural resources, said Global Witness today.
Libya’s oil sector has been abused for decades by the small elite surrounding Gaddafi, with oil revenues enabling Gaddafi to keep a grip on power for 42 years. A transparently managed oil sector could prove the catalyst for much-needed development and stability in the country. But any perception that the rebels or NATO countries have their own designs on Libya’s oil could stir further division and conflict. 
“Libya currently stands at a crossroads in several senses – one of the best ways to ensure it takes the path of peace and prosperity is to bring transparency to its oil sector,” said Brendan O’Donnell, Senior Oil Campaigner at Global Witness. “By drawing a line under Gaddafi-era corruption and the mismanagement of public wealth, the NTC could champion resource justice in the transitional constitution and set a great precedent for Libya’s future.”
Several actions must be taken to guarantee that oil and public funds benefit the Libyan people:
“Our experience shows that once bad financial practice is established in a fragile state, it takes decades to undo. Libya is a small country with a lot of oil – its people should prosper from their wealth, but this may not happen unless the transition phase is managed openly,” continued O’Donnell. “Both the NTC and the Libya Contact Group have a responsibility to take all necessary steps to ensure that the people of Libya benefit fully from their country’s wealth.”
Note to editors:
In May this year Global Witness published a leaked document detailing $65bn worth of investments held by the Libyan sovereign wealth fund, the Libyan Investment Authority. According to the document HSBC, Société Générale and Goldman Sachs were among the key western bankers for Colonel Gaddafi’s regime.
1) Statements by the Italian Foreign Minister Franco Frattini of Italy on state television on Monday (22nd August) that the Italian oil company Eni “will have a No. 1 role in the future” in the North African country” do not help in terms of perceptions that the rebels or NATO countries have their own designs on Libya’s oil could stir further division and conflict.