Corruption on the coast: Lebanon for sale

Corruption on the coast: Lebanon for sale
Exclusive investigation: Leaked documents show how businesses are profiting from sun-drenched beachfronts and shadowy deals, reports Rob Cusack.
10 min read
14 October, 2016
Beachgoers delight in Kfaraabida's free access to crystal-clear waters. But for how much longer? [AFP]

Raw photos of Kfar Abida look like they've been photoshopped just to make you feel jealous. Some 2km south of Batroun on the Lebanese coast, the resort is renowned for its pristine, unpolluted waters - which are free for anyone to access via unspoiled beachfront.

But floating in on the fresh sea air is the unmistakable scent of government corruption.

Plans to pave over this oustanding natural beauty for a private beach resort led to protests last month, to counter threats to shut out the public in the name of profit.

And Kafr Abida is not the only public beach to be sold off by the government to private investors. It's estimated that of Lebanon's 220km coastline, approximately 170km has already been turned into private property, private resorts or commercial beaches.

But what upsets most activists and locals - more than the naked profiteering from natural resources - are the accusations of corruption and of officials seizing public property for their own profit.

"The public perception is that corruption is increasing in Lebanon," said Maroun Sfeir, a member of the Save Kfaraabida movement. "Companies... are taking advantage of the fact that we don't have a president and the political system is broken.

"The parliament extended [its own mandate] for the last three years - there are no checks and balances any more."

At today's market rate it should be rented from the government for ten times that: $2.7 million - $5.4 million

According to registration documents and rental receipts for 2014, seen by The New Arab, the land at Kfar Abida is being rented out by the government for LBP 51,078,000 (roughly $34,000) a year to a company named SODEC.

The area in question is 180,000m2 - around the size of 17 Premier League football pitches - being leased out for a meagre annual rent of $5.20 per square metre.

Land registry receipt
A 2014 government receipt, showing the
annual rent for Kfar Abida as LBP 51,078,000
(click to enlarge)

Raja Makarem, managing director at RAMCO real estate advisers and one of the foremost experts on real estate values in Lebanon, thinks that this is extremely under-priced, however.

"In 2005, this land should have been rented for about $270,000 to $540,000 a year.

"At today's market rate it should be rented from the government for ten times that: $2.7 million -$5.4 million, though I think the upper estimate would be considered too high."

Land registration documents show that the land is being rented to a company named SODEC - Societe de developpement des cotes libanaises S.A.L (Society for the Development of the Lebanese Coast) - owned by the Abd al-Ahad family.

The Abd al-Ahad family are a Lebanese dynasty who run al-Husam Contracting, a umbrella group of major building and development firms including SODEC, from offices in the UAE. Al-Husam recently published drawings of their plans for the development of Kafr Abida.

Al-Husam has failed to respond to The New Arab's repeated requests for comment.

According to Transparency International, Lebanon is one of the most corrupt countries in the world. The anti-corruption NGO's 2015 report on perceptions of corruption placed Lebanon joint 123rd in the world out of 170 countries listed.

There are many reasons why Lebanese society is so corrupt, but most people lay a heavy blame on the country's fifteen-year civil war.

Source: Nancy Rahi via Save Kfaraabida

Yahya Hakim, board adviser at the Lebanese Transparency Association, attributes a lot of the problems Lebanon faces with corruption in land sales to one explosion in Saida during the war.

One third of land in Lebanon is not well documented and registered. There are no serious statistics about who owns what

"Lebanon's government were not keeping their land records in a safe archive during the war and then one day they were all destroyed," he said.

Registration Docs for Kfar Abida
2005 lease documents
for Kfar Abida, registered to SODEC
(Click to enlarge)

Hakim says that many of the land disputes that occur today across the country can be traced back to this explosion, as there are now no official records of who owns what land.

"One third of land in Lebanon is not well documented and registered. There are no serious statistics about who owns what.

"That's why many people - including politicians - have managed to lay their hands on public property.

"I'm still working to find out what land the government owns in each governorate and it has been impossible to get my hands on all the documents."

Corruption in Lebanon governs all sectors of society and all branches of government.

One famous example was last year's "You Stink" refuse crisis, when piles of rubbish started to pile up in the streets. Tens of thousands of civilians took to the streets to protest against the growing public-health problem and the political corruption which had caused it in the first place.

That public fight against corruption has continued, as a whole host of groups have emerged to monitor collaboration between the public and private sector.

There is a lot of corruption involved in anything related to the Lebanese coast.

"The government is highly biased towards the owners of private companies," said Jessica Chemali, campaign co-ordinator at Nahnoo, a Lebanese advocacy and campaign group which fights for improved access to public land.

One similar case is Ramlet el-Baida, a public beach on the outskirts of Beirut, where thousands of local Beiruti families can swim for free. The beach's beauty, however, has been undermined by the construction of a waste sewage pipe, causing water pollution - a problem that has affected much of Lebanon's seafront.

But also in the pipeline are plans for the construction of a luxury resort, named Eden Rock, which have been circling for years.

The company responsible for the potential construction is Achour Developments, owned by Wissam Achour, property developer and former son-in-law to Speaker of the Parliament Nabih Berry.

The land was bought by former prime minister Rafik Hariri in 1995, along with large swathes of the rest of Beirut. Hariri, incidentally, set up the company Solidere - reportedly to facilitate the redevelopment of central Beirut, using money from the Gulf.

Solidere made many promises at the time of its inception that it would create green, public spaces for everyone to use. Years later, and the dream of public land for the people has faded with the proliferation of private clubs for the sole use of the wealthy.

The land is almost entirely owned by Achour, yet it i understood that Achour was acting as a front for the Hariri family, who feared a public backlash should the truth of their ownership come to light.

And once the truth did out, the governor of Beirut issued an order to stop any further work, while his office investigated claims of corruption and the manipulation of documents.

Most resorts built without the correct licenses or even property ownership documents are not stopped, however, and if they are subsequently approved, owners frequently fail to perform the appropriate surveys or assessments upon which approval would otherwise depend.

"Politicians want to sell off this coastal land because they own big shares in the companies involved and so their personal interests lie in selling off this land for the companies' profits," she alleged.

"There is a lot of corruption involved in anything related to the Lebanese coast."

The number of illegal construction works by legitimate businesses on the Lebanese coast has risen dramatically since the Lebanese civil war ended in 1990. According to official government data published in a report by the research group, Information International, 48 percent of coastal property is unlicensed - and therefore illegal.

"There's no intervention from politicians, the police or any agency to remove these illegal encroachments," said Chemali. "The people in power are the ones who are building the beach resorts - it's the parliamentarians, it's the MPs - they either own the land directly or as shareholders."

Activists have a number of reasons why Kafr Abida should be saved from development, but the common factor among all the complaints centres around the need to preserve the environment.

Clara Khoury is a local activist who campaigned for election in the most recent municipal election. She set up the 'Save Kfar Abida' campaign on social media and organised last month's protest against plans to develop the beach.

"Kafr Abida is of the highest importance, as the types of rocks and caves in this area are unique," she told The New Arab.

"The area is rich in biological diversity and any building work on this beach will seriously damage the natural wealth of the the local area."

A rare sea turtle spotted at Kafr Abida

[source: Save Kfaraabida]

The mayor of Kafr Abida, Tannous Feghali, has publicly backed the proposals, despite allegations the land is being leased out at substantially below-market rates to enrich backers of local politicians, welcoming the jobs that developers have claimed will be brought to the area.

According to a report in the state news agency, NNA, Feghali said: "The project will not create any environmental damage, especially after the amendments made."

Government documents seen by The New Arab in the instance of Kafr Abida, show that Mohammad el-Mashnouq, Minister for the Environment, signed a document on 14 May, 2015, asking for a new environmental impact assessment.

One month later, on 19 June 2015, the minister signed a new document, nullifying all demand for a new report. What changed in this time period has yet to be explained by anyone in the government.

Activists are also concerned that the government decree which approved construction work for the luxury resort was signed off by Minister for Telecommunications Boutros Harb. Harb is the local MP for the area, but questions have been raised in the media as to whether an official whose government role deals with phone lines had entirely altruistic motivations when putting pen to paper on such a lucrative deal on behalf of the national government.

Boutros Harb signature
Boutros and Zaeter both sign off
on plans to develop Kfar Abida
(Click to expand)

This is not the first time that questions have surrounded Harb's political manoeuvrings.

In the words of a US official, published in a Wikileaks release: "As the one-time lawyer for Bank al-Medina chief Rana Qoleilat, Harb has not cleansed himself entirely of the whiff of scandal from Bank al-Medina's spectacular 2003 collapse."

The al-Madina bank collapsed in 2003, exposing a multinational, multi-billion-dollar money laundering front for armed groups, blood diamonds, Russian gangsters and Saddam Hussein. Its funds were found to have dissipated among the country's political class - perhaps the greatest modern example of corruption in Lebanon.

According to one of the Saudi Cables also released by Wikileaks, Harb also asked the Saudi government for cash in order to set up a political party following the 2013 elections. Harb is now an independent MP.

When asked to comment on why he had signed off on the Kafr Abida deal, Harb told The New Arab he had wanted to create jobs in an environmentally friendly project.

Harb's spokesperson said: "As a member of parliament representing the Batroun district, and upon the request of the Municipality of Kfarabida, and after consultation with the Ministry of Environment and with environmental experts and the civil society, the project was modified to maintain constructions away from the natural rocky beach, preserving it with its surroundings, and maintaining public access to it for all citizens and tourists.

"Mr Harb had to make sure that the new plan includes a sewage treatment plant that serves the resort independent from any other sewage treatment in Batroun."

The project's proposal assured the highest standard of environmental preservation, Harb said.

No new assessment needed
A government order saying that an environmental
assessment is not required, issued weeks after
a previous order that said the project required one
(click to expand) 

"The project aims to create a large number of jobs during construction, and after its opening and operation, in addition to its apparent touristic benefits to the region.

"The voices of opposition to this project have been misled by falsified information about the nature of the project and its positive impact to the Batroun district, which Mr Harb is keen on maintaining its development and prosperity."

But campaigner Jessica Chemali, at Nahnoo, said claims of jobs and development were just a way to push a personal agenda using the language of politics to exploit the needs of a neglected community.

"The local governments always say they need to invest in these coastal resorts with the excuse of creating employment opportunities," she said.

"But then they don't create development opportunities that make real employment opportunities for people.

"That lack of development and choice of good jobs is why the youth are all emigrating from Lebanon."

Follow Rob Cusack on Twitter: @rob_cusack

What are your experiences of corruption in Lebanon? Join the conversation in the comments below