Explosive evidence of Lebanon’s governance deficit

Emad Mekay, IBA Middle East CorrespondentTuesday 6 October 2020

The country was already in a beleaguered state. The devastating blast in early August has highlighted some of the reasons why.

When French President Emmanuel Macron visited Beirut in the aftermath of the 4 August 2020 port explosion, outraged Lebanese protestors beseeched him not to hand aid to their own government officials. ‘They’ll steal it again’, one protestor shouted.

The same day, actress Carmen Lebbos said the Lebanese people would rather be re-colonised by the French than be ruled by their current elite politicians. Her call resonated online and a petition signed by 50,000 people ensued. The signatories accused the government of corruption and gross negligence that caused the death of 190 people after 2,750 metric tonnes of ammonium nitrate, that were left unattended to at the port, exploded. Up to 300,000 people were also displaced.

Scenes of the blast captivated the world for days. Video footage showed smoke rise above the port and orange flames fly towards the sky. A few seconds later – an explosion, a mushroom-like cloud and a pressure wave that left fragments, death and mass destruction in its trail.

The explosives had been collecting dust in a warehouse at the port of Beirut for seven years without proper safety controls. The local media reported that requests by low-level workers to remove the material had been lost in the country’s thick and incompetent bureaucracy.

Ignorance is not bliss

The blast reignited global concern over the storage and handling of ammonium nitrate, the main component in many mining explosives and other unsafe chemicals, and how governments could prevent a similar scenario in the future.

‘It is not negligence to store [ammonium nitrate] for good intention, but it becomes a negligent act – such as the case of Beirut – when it is said to have been stored for a long period of time, perhaps expired, without care of the potential danger it possesses and that it could cause to the environment,’ said IBA Negligence and Damages Committee Chair Abdulwahab Olasupo Egbewole. ‘The unpleasant occurrence has also left the country with consequential effects of blast wave, fear, heart attack and other related human respiratory problems, and devastated the already battered economy of the nation.’

Several independent United Nations rights experts issued a call for justice and accountability on behalf of the Lebanese people. ‘This explosion and its aftermath have brought into focus systemic problems, a deficit of good governance and allegations of widespread corruption. The scale and impact of the lethal explosion are unprecedented,’ the experts said in a statement.

UN Special Rapporteur on the implications for human rights of the environmentally sound management and disposal of hazardous substances and wastes, Dr Marcos A Orellana, tells Global Insight that the Beirut explosion revealed a level of ‘irresponsibility and impunity’, which caused not only massive human loss, but also environmental destruction. ‘The Beirut explosion was emblematic because it illustrates the broad range of human rights implicated in sound management of chemicals and wastes, and brought to light the underlying governance issues in Lebanon. Governments cannot simply sit back. They must act rapidly and comprehensively to prevent the loss of lives and disastrous health and environmental consequences,’ he says.

Under international environmental and safety regulations, governments are obligated to deal with risks posed by such dangerous substances, including by proper storage or safe disposal. Lebanese officials appeared to have ignored rules to restrict the storage of such large amounts of chemicals near businesses, homes, schools or hospitals.

Egbewole says the UN Convention on Economic, Social and Cultural Rights gives the Lebanese people, like other nations, the right to a secure environment, safety of their livelihoods and good health. ‘These are rights guaranteed under [the Convention] and members of the public and citizens alike, who are aware of such potential danger, can engage the relevant government agencies,’ he says. ‘Such citizens can also leverage and rely on the Convention to take legal action to compel the government to take proactive steps about preventing such occurrence and a reoccurrence.’

A woman holds a noose as she observes a minute of silence to mark one month since the massive explosion at Beirut's port area, in Beirut, Lebanon, 4 September 2020. REUTERS/Mohamed Azakir

In a study to assess the harm caused by the blast, the World Bank, along with the UN and the European Union, estimated the cost of physical damage alone at $4.6bn. Losses, including changes in economic flows that come with the decline in business sectors, could rise to $3.5bn. Those figures do not include environmental or health costs. ‘The most severely affected sectors are housing, transport and tangible and intangible cultural assets (including religious and archeological sites, national monuments, theaters, archives and libraries),’ the report says.

Orellana backed calls for an investigation. ‘Both the Lebanese government and the international community must investigate promptly and independently to determine the extent of any violations of international obligations,’ Orellana said. ‘This investigation should underscore international human rights obligations on hazardous substances, clarify responsibilities and negligence related to the explosion, as well as ensure people’s right to information about the consequences and health impacts of the toxic cloud of nitrous oxide released from the explosion.’

Economic meltdown

For the past two years, thousands of Lebanese citizens have been taking to the streets to protest against a rapidly worsening economic crisis that they say is caused by one example of gross negligence after the other.

In 2018, demonstrations broke out for months against government failure to organise refuse collection. Rubbish had been piling up all over the country causing environmental and health problems. Weeks later, Lebanese citizens, particularly young people, were forced to the streets yet again, this time to decry repetitive power outages that would last for 12 hours at a time. Mass protests also flared over government plans for a sudden tax on WhatsApp calls, gas and tobacco.

The major blow came in early 2019 when many of those already disgruntled with the government witnessed their bank savings evaporate in a matter of days. Lebanese banks that once lured deposits with unmatched high rates of around 15 per cent were now turning away customers and telling them they can no longer withdraw their dollars. The country’s nearly ten million diaspora routinely deposited their savings in the banking sector as well. They and their families at home lived off high rates. The US dollar made up 70 per cent of all deposits in Lebanese banks.

As a country of nearly six million people with no agricultural or industrial base, Lebanon relies heavily on imports for its citizens’ needs, a condition that carries a permanent dependence on foreign currency. Despite 30 years of peace after the civil war, successive governments favoured the easy fix of money from tourism, aid from wealthy foreign countries (such as Saudi Arabia) and expat remittances.

The state turned to borrowing most of its money from the banking system and engaged in expensive projects, whose contracts often went to officials connected to the government leaders of their families. All that came to a head on 9 March 2019, when the former Prime Minister, Hassan Diab, announced that his government was unable to make a Eurobond payment of $1.2bn. The money was diverted instead to pay for the country’s basic necessities. He also said his cabinet would have to restructure Lebanon’s $90bn debt load that reached the unsustainable rate of 170 per cent of gross domestic product (GDP).

‘We had $180bn of deposits at the height a year and half ago; two thirds of it was in dollars; $120 billion which was spent. It’s no longer there,’ Dan Azzi, former chairman and Chief Executive Officer of Standard Chartered Bank (Lebanon) tells Global Insight. ‘Each person has a piece of paper that says he has money in the bank but in reality the money’s been spent. The wealth was artificial. Easy come, easy go! The money came in easily pretty much because it was fake interest and then it got lost the same way. It’s just a computer entry in essence.’

Forecasts for Lebanon’s 2020 real GDP growth even before the massive explosion were well into the red, but the Covid-19 pandemic finished off any hope left. Summer tourism and expat transfers, the country’s two main dollar sources, were both smothered. The Lebanese pound plummeted by 80 per cent in the black market, while inflation shot to 60 per cent.

The economy and basic public services suffered even further. With the disappearing savings, the long blackouts and the accumulating rubbish became more symptoms of a dysfunctional government. Some parts of the country suffered lack of safe drinking water and limited public healthcare, while private businesses were firing staff and going bankrupt at a dizzying pace.

The World Food Program says that this year, at least one million of the country’s six million population now live under the poverty line, with many more unable to provide enough food for their families or afford a private power generator.

Deep-seated anger at the ruling class spiked to unprecedented levels over the past few months. Bank clients accused top politicians of amassing wealth by siphoning off funds from public savings and government contracts. During street protests, bank branches were attacked and set on fire.

All means all

For the first time since the end of the civil war in 1989, anti-government protestors demanded an end to the sectarian quota system, instituted by the French during the colonial era that has dominated political life. Protestors carried banners that said ‘No Confidence’ to indicate their loss of faith in the system and ‘All Means All’ to condemn all top politicians, regardless of sect.

According to Lebanon’s founding 1943 National Pact, power is shared based on the country’s communal make-up, including Christian, Druze, Sunni and Shia Muslim factions. The president would come from Maronite Catholics, the largest Christian group, while the prime minister is always Sunni Muslim. The speaker of parliament would be a Shiite, and the small but powerful Druze community shared in military, ministerial and parliamentary positions. That arrangement often made leaders offer guaranteed employment to loyalists and members of their own community with little regard to qualifications or merit. This created a state of inefficiencies, corruption and a sense of impunity among civil servants.

Azzi, who had written extensively about the economic crisis, said the answer to the inefficiency of state enterprises is to modify the cradle-to-the grave employment arrangement which ‘makes it nearly impossible to fire someone, even for gross negligence’, such as the Beirut port explosion.

‘The government employment system, already bloated from using it to unnecessarily employ political supporters through a system of cronyism, needs reduction anyway,’ he says. ‘One way to do it is by firing the bottom ten per cent for the next five years. That might improve performance and reduce its cost.’

Amid the growing public frustration, the government promised to overhaul losing state-run companies and the defaulting public sector including the failed electricity company. Sensing an emergency situation, Western nations that had tolerated mismanagement for political leverage started pressing for real reforms to root out graft, cut escalating budget spending and lower debt.

‘There must be more predictability, transparency and accountability – with comprehensive audits of key institutions, including the central bank,’ says IMF Managing Director Kristalina Georgieva in a statement. ‘Commitment to these reforms will unlock billions of dollars for the benefit of the Lebanese people. This is the moment for the country’s policymakers to act decisively.’

The IMF says it stands ready with a $10bn bailout but only with preconditions that Beirut restructure the economy and battle rampant corruption. ‘It looks like a forensic audit is now a precondition by nations and organizations that hold the levers of power (or ability to write us checks), namely the EU, France, the IMF and the United States,’ Azzi says. ‘I think a forensic audit of the central bank is crucial. You can’t have some $75bn or more disappear without knowing what happened. Lebanese depositors and taxpayers have a right to know why they racked up these massive losses and where the money went. It’s not a bad thing for the forensic audit to be expanded to other government institutions.’

The IMF package faces geopolitical strains though. Saudi Arabia and the US are likely to continue opposing aid as long as Iran-backed Hezbollah Shiite group, the most formidable military force in the country, is represented in the government. Conversely, Hezbollah leaders themselves object to the IMF line of credit for fear it will turn into a backdoor for more Saudi and US influence.

Token accountability

Despite the barrage of calls for accountability in the devastating port explosion and over the economic debacle, analysts following the situation in Lebanon remain sceptical. They note that only token measures have been taken so far, and that the government has been silent about the possibility of paying damages or compensation in cases of wrongful death or negligence relating to the explosion.

On 5 August, the Lebanese government initiated an administrative, not criminal, inquiry into how the explosion happened and later referred the case to the Judicial Council, a special court that has drawn criticism in the past for failing to guarantee fair trials or due process.

‘No high-ranking public officials – on the level of ministers and presidents (who confessed that they knew about the ammonium shipment) – have been summoned before the court for an investigation,’ says Julien Courson, Executive Director of Lebanese Transparency International.

‘Local media outlets are reporting that ministers are refusing to show up before the Judicial Investigator, only the Prime Minister ‘invited’ the Investigator to provide insights of his role. Detention is limited to a couple of general directors and low ranking employees,’ Courson, who followed the investigation since its start, tells Global Insight.

Egbewole, also a jurisprudence and international law professor at the University of Ilorin in Nigeria, says if conducted properly, the results of such an investigation may carry implications for Lebanon under international law whether foreigners were injured in the accident or not. ‘If proper investigation is conducted, findings made from such investigation may reveal facts that will lead to prosecution of suits under international law,’ he says. ‘It must, however, be emphasised that it is possible to still have international law implications on the country if it is established that the principles of the UN Globally Harmonized Systems of Classification and Labelling of Chemicals are not adhered to in the storage, the country may still be liable even when there is no direct injury on foreign citizens.’

Rights groups however, fault the Judicial Council for not having the jurisdiction to prosecute government officials, or the independent external observers or technical experts needed for a fair probe.

‘The government referred the investigation to the Judicial Council, a court whose proceedings inherently lack independence’, says Lynn Maalouf, Amnesty International Middle East and North Africa Director.

On 10 August, Prime Minister Diab resigned but remained in office until the appointment of a new cabinet. After promises of real change, President Michel Aoun settled on Mustapha Adib, the country’s ambassador to Germany to lead the new government – a decision interpreted as business as usual despite the scale of the port disaster. ‘The new government came from the same oligarchs’, says Randa Slim, a Lebanese-American political analyst with the Washington-based Middle East Institute. ‘The process by which Dr Adib was selected smacks of business-as-usual, as if the massive explosion in Beirut was not sufficient to force a change to the status quo.’

When Adib visited two of the hardest hit neighbourhoods by the blast, he was confronted by angry Lebanese citizens. ‘You killed our children, you are not allowed to be here,’ one protester shouted at him.

In mid-August, Lebanese lawmakers declared a two-week state of emergency, which granted expansive power to the military, raising further concern over freedoms and liberties. The Zürich-based International Press Institute, a global network of media professionals, urged the legislature to retract this decision as it gave the army powers seen as a threat to free speech and assembly.

Those worries materialised on the ground. In response to the blast, protesters occupied government buildings to call out the incompetence of the country’s ruling elite. The military, along with various branches of security, responded with ‘excessive force’, such as live ammunition, metal pellets, rubber balls and tear gas.

‘Instead of lending a helping hand – as Beirut is still digging themselves out of the explosion debris – Lebanon’s security apparatus made a fist and pummelled protesters with shocking amounts of violence,’ says Michael Page, Deputy Director of Human Rights Watch’s Middle East and North Africa division. ‘Such unlawful and excessive force against mostly peaceful protesters shows the callous disregard of the authorities for their own people.’

Even the French President, who initially signalled agreement with the protestors that aid should no longer go to officials, ended up saying that some $298m raised to help the country in a conference organised by Paris would still go to the Beirut government after all – just not long-term aid.

Early in September, a telling scandal broke out. Sri Lanka had donated some 1,675 kilograms of Ceylon tea to victims of the Beirut port blast. After receiving the aid, instead of distributing the beverage to the victims, the presidential palace gave it instead to families of the president’s guards.

‘The fact of the matter is that what happened is an indictment of the whole flawed sectarian corrupt system. How do you bring to justice a whole system other than by tearing it down and rebuilding it?’ asks Azzi.

Emad Mekay is the IBA’s Middle East Correspondent. He can be contacted at emad.mekay@int-bar.org

Header pic: Smoke rises from the site of an explosion in Beirut, Lebanon, 4 August 2020. REUTERS/Mohamed Azakir TPX IMAGES OF THE DAY