Update: Poland Shale Gas Licensing Scandal
Corruption scandal in Poland: "investigation developing"
All seven suspects in the alleged shale gas licensing corruption scandal in Poland have been released. The court in Warsaw set bails of up to 200 thousand zlotys for six of them.
Additionally, the court placed some suspects under police supervision and banned them from leaving the country. Some viewed the verdict as underlining the impeccable reputation of the three civil servants of the Ministry of Environment.
The prosecutor’s office filed a complaint against the court’s decision concerning three of the six persons released on bail.
According to the Deputy Appellate Prosecutor, the investigation is still developing. Waldemar Tyl said that at least one more company is currently within the scope of this inquiry.
Are individuals or the system responsible?
The Polish government has deflected charges that shale gas licenses has been issued "too cheaply", repeatedly insisting that concessions are not a source of income, because an exploration license is nothing more than “a right to spend money.”
Officials have underlined the high risk of investment required and point to the fact that the government does not participate in costs of exploration.
However, critics of the licensing system have argued for a long time, that rules of allocating exploration rights are open to abuse and corruption.
In the recent article "Down to Earth" The Economist noted that those rules were designed "for a climate in which a handful of state-owned firms would be operating," suggesting they were inadequate to the new environment which has emerged over the past several years, as Poland “invited investment from multiple domestic and foreign companies."
“The prices, at around €100 per square kilometre, were trivial.”
The weekly quotes Grzegorz Pytel of the Sobieski Institute, who has been warning that instead of established first-come, first-served rule, competitive bidding rounds should have been introduced. Pytel argues that a system of issuing licenses potentially worth a lot of money, so cheaply, creates an environment that may foster corruption.
Asked about these rules at the press conference, Prime Minister Donald Tusk said that he didn`t consider the first-come, first-served process as exceptionally corruption-prone.
Tusk added that rather than the system, it was certain entrepreneurs and civil servants that were to blame.
"There is no method, that can ultimately eliminate corruption" he observed.
“I agree that human weaknesses played their role,” commented Pytel to Natural Gas Europe. “However human imperfection may be either strengthened or weakened by the system.”
Former Head Geologist, profesor of geology and opposition MP Mariusz Orion-Jedrysek goes a step further.
“I accuse the Donald Tusk’s government of abandoning the ready-made reform of the system,” commenting to a reporter from Poland’s RMF FM radio.
According to the Polish government, the current investigation proves that authorities are taking a vigilant stance towards the concession process.
"The detentions result from our intention to make investigative authorities act zealously on the areas where extensive public interest and extensive sums of money come into play," said the Prime Minister.
Deputy Minister of Environment Henryk Jacek Jezierski, who was replaced as the official overseeing the licensing process several weeks ago, declared that he could hardly imagine any grounds for the corruption allegations against his subordinates.
"I`m shocked," Jezierski was quoted as saying by Gazeta Wyborcza.