Khaberni - Media outlets recently reported that the Cabinet decided to approve the extension of the concession agreement granted to the National Petroleum Company for exploration and production of petroleum and gas in the Risha field for an additional (15) years, extending its scope until the year 2061.
Media sources emphasize the importance of this step and its alignment with the economic modernization vision. However, shouldn't the government have made the amendment according to constitutional frameworks?
The legislator required that the concession be ratified by law, as the legislator stated the following:
"Every concession granted to grant any right related to the investment of mines, minerals, or public utilities must be ratified by law" (Article 117 of the Constitution).
The Constitutional Court had previously issued an interpretative decision for that article, which is its decision number (1) for the year 2013; indicating the necessity of the National Assembly's approval when amending the terms of the concession agreement; meaning that the initial approval that appeared through the ratification law for the concession agreement is not sufficient when making amendments to the substantive terms of the concession agreement.
Regarding the request for interpretation, the court states that it is a request: "to interpret Article (117) of the Constitution to determine whether it allows the Cabinet - without obtaining a law - to amend a surface distillation concession agreement for oil shale, concluded between the Government of the Hashemite Kingdom of Jordan and the Karak International Petroleum Private Shareholding Company, or not?"
The court continues about the details of the amendment: "Since the query relates to granting a new concession right in an area of (32) km2, it thus constitutes a new agreement in a substantive matter, the geographic area with this size, and it cannot be argued that it was ratified on the agreement which Article (41-3) of it allowed for modification or alteration by written agreement between the parties, because that would mean affecting the entire agreement and would grant the concession for other new areas without referring to the constitutional authority, which is the legislative power, and this excludes the constitutional text from being applied to the present case and authorizes the executive power to decide the granting of it, which is a clear violation of the provisions of Article (117) of the Constitution which established a rule requiring any concession agreement involving a right to be ratified by law issued for this purpose".
Then the court affirms in its decision the necessity of the National Assembly’s approval on the amendment saying: "And this rule is among the principal rules that the nature of the powers established for the National Assembly in terms of overseeing the granting of concessions of mines, minerals, and public utilities requires; for if this oversight did not extend to this additional granting it would render the oversight in reality meaningless, and it follows from this that no entity is allowed to grant any right involving the investment of any of these resources no matter its amount or size without it being ratified by law, meaning that the judgment of this article encompasses any amendment or change affecting this right, as long as the constitutional text is absolute, and must be taken in its entirety".
Then the court concludes its decision by saying: "... Based on the foregoing, the court unanimously decides that the Cabinet does not have the authority under the above constitutional text to grant any concession related to the investment of mines, minerals, or public utilities, no matter its amount, unless ratified by a law issued for this purpose; whether the concession is general or partial, even if the parties agreed on the amendment or change".
Returning to the government's decision subject of the article, while it does not constitute a modification in the geographic scope of the concession, it does represent a modification of its temporal scope, as it includes extending the term of the concession agreement by (15) years, and by reading the mentioned interpretative decision, it can be said that this constitutes an overstep of the approval that was made by the ratification law of the concession agreement, which requires obtaining a new approval from the National Assembly.
Based on the foregoing, and in compliance with the interpretative decision issued by the Constitutional Court, it may be necessary to submit an amended bill to the ratification law of the concession agreement and complete the legislative process to ensure the validity of the procedures for amending the duration of the concession agreement.
