Civil Society Groups Challenge Ugandan Government Over Oil Transparency

Civil society groups today questioned recent media reporting on increased transparency in Uganda’s petroleum sector and called for the Government to commit to publish all oil deals.  The call comes as the Ugandan Parliament considers crucial new oil laws which will dictate how the emerging oil sector is managed for decades to come. However, these laws will not necessarily apply retrospectively to the existing Production Sharing Agreements (PSAs).

An article that appeared in the Ugandan newspaper New Vision, on the 30^th June 2012, noted in its headline that ‘Government discloses oil deals.’ However, it appears from the same article and subsequent enquiries that only limited information - on petroleum royalty rates - has been released to MPs.

“We welcome steps towards greater transparency, but it is important to be clear on what has and has not been revealed,” said George Boden, a Campaigner at Global Witness. “Royalty details are a crucial piece of information for the Ugandan public, but they represent only a tiny fraction of the overall picture. To truly understand the nature of these deals we need to see the full production sharing contracts and associated documents.”

As the New Vision article points out, the most recent PSAs, which were signed by the Government despite a Parliamentary resolution calling for a freeze on any further deals until new laws were in place, have not been made public. As such, the Ugandan public does not have access to full information on the agreements, including full royalty details, and taxes and one off payments that the companies have agreed to pay. Neither do they know how crucial social and environmental costs have been factored into the deals. The existence and nature of any stabilisation, confidentiality and arbitration clauses is also unknown.

“The reality is that Uganda’s petroleum sector has been shrouded in secrecy and marred by strong central government control, corruption allegations and international tax disputes. Ugandan citizens still do not have access to the contracts themselves, and the proposed oil legislation currently before Parliament does little to quell concerns over a lack of transparency in the sector,” said Dickens Kamugisha, Chief Executive of AFIEGO and Chair of the Oil Watch coalition of Ugandan CSOs.

Global Witness believes that transparency is vital to ensuring the Government gets a good deal for its oil, protecting the country against corruption, and minimising environmental and social harm. Despite previous commitments, the Government has so far failed to join the Extractive Industries Transparency Initiative, an international multi-stakeholder initiative which promotes transparency in the oil and mining sectors. Nor has the process by which rights to Uganda’s petroleum have been allocated been clearly outlined.

“Transparency is not just about ad-hoc statements and briefings. The Government should commit to publishing contracts in full, like Timor-Leste, Ghana and Denmark. They should also commit to publishing all incoming payments on a project specific basis, and opening up the allocation process to public scrutiny. This is the only way to ensure full public confidence in the management of the oil sector,” said Winifred Ngabiirwe, Chair of the Publish What You Pay Coalition in Uganda.

The new oil laws currently before Parliament do not guarantee transparency over key documents such as PSAs. The laws also give extensive discretionary powers to the Minister with responsibility for petroleum, and virtually no role for Parliament. There is very limited information about how a newly formed national oil company will function and what information will be made available about its operation and finances.

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For further information please contact George Boden [email protected] or +44 (0)207 492 5899, +44 (0)7808 767 134.