Waste of resources

Suspicions continue to grow about the government’s diplomatic push to secure natural resources overseas, which was enthusiastically pursued by the Lee Myung-bak administration. As it turned out, several public corporations, including the Korea National Oil Corporation (KNOC), have suffered massive losses or have had to sell overseas properties at much cheaper prices than they acquired them. A case in point is KNOC’s acquisition of NARL, a subsidiary of Harvest Operations Corp., a Canadian oil and natural gas company based in Calgary, Alberta.

KNOC sold off NARL for 20 billion won ($18.3 million) due to its unprofitability after purchasing it for a total cost of 2 trillion won. Simply put, our government-funded corporations were forced to bail out of money-losing energy development projects that they pursued recklessly. As the financial losses lead to more public sector debt - which ultimately is paid for by the public - the corporations must be censured or punished depending on the degree of their responsibility for the fiasco.

The opposition New Politics Alliance for Democracy has called for a thorough investigation by the National Assembly into all aspects of the former administration’s overseas resources exploration projects to see if there was any favoritism toward particular advisory firms. Aside from the opposition’s demand for the legislature to investigate the mess, the splinter opposition Justice Party and the liberal Lawyers for a Democratic Society accused former and incumbent CEOs of KNOC, the Korea Resources Corporation, the Korea Gas Corporation and others of malfeasance and referred their complaints to the prosecution.

A prosecutorial investigation is unavoidable. The government’s Board of Audit and Inspection (BAI) has already been probing potential malpractices in the procurement of oil and gas fields around the globe. Hwang Chan-hyun, Head of the BAI, said he would punish anyone responsible for civil or criminal misconduct. In that case, he will also consider a suspension of ongoing projects.

Overseas resources development and diplomacy is essential for our long-term national interest regardless of who is in power. But if the decision-making process was opaque and if the projects were determined unfairly, someone has to take responsibility. We believe that the prosecution must first discover the truth behind all the suspicions and locate the responsibility. And if the prosecution’s investigation is lacking, the assembly can kick off a probe of its own.

JoongAng Ilbo, Nov. 18. Page 34