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Govt asked to be more open about oil deals
Left to right: Mr Bashir Twesigye, the chairperson of CSC; Mr Paul Twebaze, a research fellow at ACODE and Mr Siragi Magara from Oxfam address a press conference in Kampala yesterday. PHOTO/ BUSEIN SAMILU
What you need to know:
CSOs say government should be more open about deals to ensure transparency, accountability, and proper management of revenues from the oil, gas, and mining sectors, as well as to prevent excessive recoverable costs and illicit financial flows.
Civil society organisations (CSOs) operating in Uganda’s oil, gas and mining sectors, yesterday resurrected a longstanding appeal to government, asking that it makes public details of production sharing agreements it has signed with foreign entities.
Led by the Civil Society Coalition on Oil (CSCO), and the Advocates Coalition for Development and Environment (Acode), they said failure to disclose particulars of these transactions makes it harder to ensure accountability.
An unspecified number of agreements have been signed with such multinationals as Total Energies, China National Offshore Oil Company (CNOOC Uganda Ltd). However, details of these deals remain private.
It is because of that pervasive secrecy that only a handful of well-placed Ugandans know exactly how proceeds will be shared once the projected 6.5 billion barrels of oil begin to flow from the Albertine Graben, with first oil anticipated two years away in 2025.
Under these agreements, the country’s interests generally fall under the ambit of the Uganda National Oil Company (Unoc), a government-owned subsidiary.
Total Energies and CNOOC Uganda, who together own 66.6 percent and 33.3 percent shares, respectively, in the Tilenga and Kingfisher oil development areas are supposed to invest $7.5 billion (about Shs27.8 trillion) over five years.
The two players are also partners with Unoc and Tanzania Petroleum Development Corporation in the $3.5 billion (about Shs12.9 trillion) East African Crude Oil Pipeline (Eacop) project. Construction of the pipeline has been planned to commence next year.
Concerns about secrecy dominated discussions at a public meeting in Kampala held ahead of government’s launching of the 2020/2021 Extractives Industry Transparency Initiative (EITI) report for Uganda today.
As a member of EITI international, both Uganda and partner companies are required to publish reconciled data on revenues so as to assure transparency, accountability and proper management of revenues.
According to point 2.4(a) of the 2019 EITI universal standards, countries should disclose all contracts and licences that have been granted, entered into or amended as of January 2021.
A delegation from EITI International is expected in the country next month to assess if Uganda has complied with set requirements.
Speaking to journalists yesterday, Mr Bashir Twesigye, the chairperson of CSCO, said it is absurd for the government to continue keeping Ugandans in the dark.
“Government has completely refused to avail the agreements. Even the members of Parliament reached an extent of enacting the East African Crude Oil Pipeline Bill without knowing the content of the agreements. This is very bad for a country which claims to be transparent,” he said.
A June 30 EITI report revealed that Shs241.3b was collected as revenue from 12 companies in 2020/2021. Of this, Shs180.2 billion accrued from the activities of Total Energies, CNOOC, Oranto Petroleum Ltd and Armour Energy Ltd, all in oil and gas.
The remaining Shs61 billion came through Tororo Cement Ltd, Hima Cement Ltd, National Cement Company Uganda Ltd, Kampala Cement Co Ltd, Goodwill Ceramic Co Ltd, Wagagai Mining U Ltd, Mota EngilEngenharia E Construcao África, Sa and Virat Alloys Ltd.
A research fellow at Acode, Mr Paul Twebaze, warned that because oil companies are investing without the government publishing how much they are putting in, Uganda runs the risk of much more being taken away as recoverable costs.
“That is why we need total transparency by both government and these companies otherwise we shall pay them excess,” he said. Mr Twebaze said: “Given the prevalence of illicit financial flows in other mineral and petroleum-rich countries, and the recent reports by the Office of the Auditor General regarding revenue leakages in the mining sub-sector, we call upon government to be more transparent”.
To-date, despite requirements and requests for public transparency, the government remains adamant.
In his August 4, 2021 response to the then permanent secretary of the Energy ministry, Mr Robert Kasande, Solicitor General Francis Atoke advised the official to never share any document with third parties, saying they contain confidential sensitive commercial information.
Mr Kasande had sought guidance after city lawyer, Mr Male Mabirizi, petitioned, asking him to avail copies of Eacop agreements signed by the President and his Tanzanian counterpart, Ms Samia Suluhu and oil companies.
“All the three contractual agreements contain a confidentiality clause which prohibits disclosure of information of a financial, technical or commercial nature relating to Eacop project to any third party, except with consent of the other party or where the disclosure is allowed by law or disclosure is as a result of a court order or required in court proceedings,” Mr Atoke noted.
At yesterday’s event, the government was reminded that it merely manages extraction of Uganda’s natural resources on behalf of Ugandans, who are the real owners.
Meanwhile, Ms Winfred Ngabiire, an activist with Global Rights Alerts, asked the government to always report on the environmental impact of extractives since this is required under the 2019 standards.
RULES
According to point 2.4(a) of the 2019 Extractives Industry Transparency Initiative (EITI) universal standards, countries should disclose all contracts and licences that have been granted, entered into or amended as of January 2021.
