Kuwait Times

Published Date: January 28, 2009
By B Izzak, Staff Writer

KUWAIT: The government tactically outclassed its opponents in the National Assembly yesterday when MPs passed a proposal that calls for a relatively mild investigation into a controversial deal with US firm Dow Chemical. Three proposals were put before the Assembly, two of them calling for a wide investigation of the Dow deal, the fourth refinery at Al-Zour, oil sales to Iraq and reports that Kuwait Oil Company deducted 25 percent of oil revenues in the past two fiscal year.

The third proposal called for forming a five-MP panel to probe allegations of profiteering and accepting commissions by oil executives in addition to reviewing a detailed report on the four issues to be submitted by the government within two months. When the voting took place, 42 MPs, including all government ministers, voted in favor of the latter proposal while 16 MPs opposed it and two abstained.

The decision calls for the committee to investigate "suspicions of profiteering and accepting all forms of commissions by oil executives" who were involved in the four issues, especially in the deal with Dow. The committee will also investigate any action punishable under the 1993 public funds protection law. In addition, the decision requires the government to provide within two months a detailed report on the procedures followed in the four projects, the sides that have taken part in them and those who h
ave made any opinion on the projects.

Foreign Minister and acting oil minister Sheikh Mohammad Al-Sabah said the government will provide the Assembly with all the details and the documents on the four issues within the stipulated timeline. The assembly elected MPs Ahmad Al-Saadoun, Abdullah Al-Roumi, Khalaf Dumeitheer Al-Enezi, Marzouk Al-Ghanem and Raja Al-Mutairi as members of the investigation committee.

The two foiled proposals were submitted by the Islamic Constitutional Movement and the Popular Action Bloc. The two proposals call for launching an immediate, fully-fledged investigation that should involve questioning the prime minister, ministers, members of the Supreme Petroleum Council and other oil executives. ICM member MP Nasser Al-Sane said the approved proposal is not sufficient to reveal the truth in full and that ICM will study its further course of action after its proposal was rejected. "We ha
ve open options and we will soon meet to decide what action should be taken".

Sheikh Mohammad said the government supported the approved proposal because the country was bracing for a legal battle with Dow Chemical over the terminated deal. "We have been officially informed that legal procedures will be taken against Kuwait," he said. The minister also added that what is important here is that no statements or actions should be done that could undermine Kuwait's position in the potential court battle.

During the debate, MP Musallam Al-Barrak launched a scathing attack on the Kuwait Petroleum Corp (KPC) Chief Executive Officer Saad Al-Shuwayeb whom he accused was behind the "suspicious Dow deal". "We have very strong suspicions that commissions had been taken in the Dow deal" and that top oil executives have hidden some important information about the deal.

MP Mohammad Al-Saqer said the country wants to know why the government signed the project and then swiftly scrapped it. "We want to know the reasons for signing the deal and also the justifications for cancelling it" he said. MP Mohammad Al-Mutair said the government should tell Dow Chemical that if it initiated legal action against Kuwait on the deal, it risks losing its strategic projects in the country.

Kuwait was to pay $7.5 billion to become a 50-50 partner in a joint venture called K-Dow Petrochemicals with Dow Chemical. While cancelling the deal, the government said that global economic conditions were not favorable.