Failed attempts at plugging leaks

Print edition : March 20, 2015

MOST journalists covering the petroleum sector aver that leaks of government documents to corporate houses are endemic in the Ministry of Petroleum & Natural Gas (MoPNG). They also say that Ministers who show determination to plug the leaks end up losing the battle in the face of resistance from powerful lobbies with deep nexus with officials.

Soon after the Narendra Modi government assumed office last year, National Security Adviser Ajit Doval wrote to Cabinet Secretary Ajit Seth saying that in the last few years it had become a regular practice, particularly in the media, to violate secrecy laws with impunity. He also expressed wonder how a classified briefing to the Prime Minister about the Navy had found its way to a TV news channel. Newspaper reports have credited Doval for initiating the investigation into the leaks. Doval may benefit by seeking to understand why the previous efforts to plug the leaks failed.

In October 2012, two unskilled day labourers were told to leave the MoPNG for leaking confidential documents. A story carried on petrowatch.com referred to how Additional Secretary Sudhir Bhargava in the Ministry summoned six employees to investigate how oil and gas companies were gaining access to confidential papers.

Petrowatch.com is a subscription-only fortnightly market intelligence website on the Indian oil and gas industry, staffed by investigative journalists in Delhi, Mumbai and Ahmedabad. Petrowatch.com claims that in its 17-year history it has never uploaded confidential government documents or traded them for monetary benefit and that it does not tolerate the payment of bribes to secure government documents, something journalists Santanu Saikia and Prayas Jain have been accused of doing to promote their websites, indianpetro.com and metisbs.com respectively.

During S. Jaipal Reddy’s term as Petroleum Minister, Secretary Girish Chaturvedi passed on to the Chief Vigilance Commissioner (CVC) a list of 16 people in the Ministry suspected of leaking confidential documents for a price, either as freelance operators or as part of a wider racket, says another story on petrowatch.com. Chaturvedi left it to the CVC to report back to the Ministry with a recommendation for disciplinary action. What action the CVC had recommended and what action the Ministry took against these 16 persons is not known. Journalists covering the Ministry say officials dismiss queries regarding attempts to plug the leaks as an “internal matter”.

The rates are as low as Rs.500 to buy a single Cabinet note; around Rs.50,000 a month will ensure a regular stream of confidential paperwork, bound in string, delivered in a filthy plastic bag to an address of your choice, says another story on petrowatch.com.

Some officials apparently think that the surveillance idea is idiotic as the Ministry is not the only place people can meet to leak information. Others say it is lower-level employees who leak “photocopied” documents which are sensitive. “They sell these documents, but don’t even know the value of the information they contain,” says a report written by Pooja Srivastava on August 14, 2014, at Petrowatch.

Another report appearing on Petrowatch and written by Pooja Srivastava says leaks are especially damaging when ONGC Videsh Limited (OVL), as a government company, seeks the Ministry’s approval for overseas acquisitions and sends in a proposal often containing the acquisition price. “We face problems if this is leaked before the deal is closed,” an official of the Ministry is reported to have confided to Petrowatch.

Besides, corporates find internal notes within the Ministry before a decision is taken extremely valuable to influence the Ministry. When the notes suggest that a decision is likely to go against a corporate, it exerts pressure on the officials to change these before the decision is taken. “It all depends on the interpretation of certain clauses, and corporates seek to influence the Ministry to interpret clauses of production sharing contracts [PSCs] in a manner which favours their business interests, when they know through leaks that a decision is likely. After all, they need to recover costs, which they incurred because of gold-plating,” says a journalist who covers the MoPNG.

Gold-plating

Gold-plating refers to superfluous increase in capital expenditure or expenditure on plant and equipment. Reliance Industries Limited was accused of gold-plating at KG-D6 block, influencing the economics and viability of extracting natural gas in that block, which it manages.

Paranjoy Guha Thakurta’s book Gas Wars: Crony Capitalism and the Ambanis (2014) explains gold-plating succinctly: “The contract between RIL and the government allowed the former to recover the entire capital expenditure before the government received any meaningful revenues from its share of gas. Therefore, if RIL could overstate its expenditure, it could make consumers pay a higher price for the gas, reduce the government’s share of profits, and earn super-normal profits for the company” (pages 49-50). RIL, however, denies that it indulged in gold-plating with an intention to make huge profits as alleged.

V. Venkatesan

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