Violations found in Kuwait's oil sector

KUWAIT CITY - The parliamentary committee tasked to investigate violations in the oil sector has finalized its report after holding 22 meetings. Committee Chairman MP Al- Humaidi Al-Subai’e disclosed that they uncovered grave administrative and financial violations which have been committed for years, away from questioning.

He said the report that is supported with evidence includes 90 recommendations such as the referral of nine cases to the Public Prosecution.

He confirmed the committee unanimously approved these recommendations, except two members who voiced objection to two recommendations and presented justifications for doing so. He added the committee found various violations related to appointments like appointing employees without advertising the vacancies or the advertisements lack vital information such as the required fields of specialization or the number of employees needed.

He revealed a large number of the children and relatives of senior officials were appointed to different posts even if they failed to meet the required qualifications or experience.

Therefore, the committee recommended referral of these senior officials to the prosecution, he said. He added the administrations of oil companies manipulated procedures to appoint their relatives without advertising the vacancies and this is done by appointing the relatives under contracting companies which take 35 percent of the salary.

He said the appointment regulations are in favor of certain individuals, pointing out that the interview constitutes 80 percent of the applicant’s evaluation marks to enable the administration to pass the preferred candidate regardless of his qualifications.

On violations related to public money, he confirmed the committee found grave errors that resulted in huge losses for overseas projects such as the Vietnam refinery whose losses exceeded its capital and will be bankrupt soon unless prompt action is taken to correct the errors. He said the committee recommended referral of the person responsible for signing the contracts of Alma & Galia offshore project to the prosecution, because he ignored the study conducted by the Board of Directors of Kuwait Foreign Petroleum Explorations Company (KUFPEC) and he did not wait for the results of the feasibility study.

He added that the losses of the project reached more than $1 billion even after the decision to shut down the oil fields due to environmental violations. He went on to say the committee’s recommendations include referral of a former executive director at Kuwait National Petroleum Company (KNPC) and the assistant executive director for projects to the prosecution for issuing a certificate to a contractor that the rains in November 2018 are classified as force majeure.

The certificate enabled the contractor to ask the relevant insurance company to pay him KD 80 million and the company has paid KD 10 million so far, he narrated. He pointed out that KNPC rejected a similar request submitted by another contractor although the amount of rainfall on the days for which the latter claimed for damages is more than that of the first contractor.

When the committee asked the assistant executive director, he admitted that he made the report which the former executive director used as reference for issuing the certificate to the first contractor.

The assistant executive director based his report on the Kuwait Meteorology Department’s report, but it turned out the assistant executive director released his report many days before the Kuwait Meteorology Department issued its report, the lawmaker explained.

He added the committee also recommended referring the former executive director of Kuwait Petroleum International (KPI) to the Prosecution due to his intention to harm the public treasury by importing catalyst substances from Vietnam refinery through direct contracting.

He disclosed the committee found major violations in the appointment of expatriate employees and consultants whose experience and qualifications do not match the high salaries and privileges they receive. He cited as an example an expatriate secretary who receives a salary of KD 1,300 while a highly qualified Kuwaiti employee receives only KD 850.

He added that a number of expatriate consultants receive more than KD 5,000 salary as well as other privileges such as housing, children’s education allowance, private vehicle and free annual plane tickets. He then called on the National Assembly and HH the Prime Minister Sheikh Sabah Al- Khaled Al-Sabah to support the committee’s report and implement the recommendations in order to prove their commitment to combat corruption.

In another development, MP Riyadh Al-Adasani forwarded queries to HH the Prime about the lawsuit filed by the Public Prosecution in California, US to recover more than $100 million misappropriated by former senior officials at Kuwait’s Ministry of Defense.

He disclosed the lawsuit was filed in response to complaints submitted from 2009 to 2016 that some of the then officials at the ministry’s office in London opened more than six illegal bank accounts which were used for transferring more than $100 million from the public treasury of Kuwait.