Civil Society reacts to oil reports

On February 8, 2012, The Petroleum (Exploration, Development and Production) Bill 2012 was read for the first time in Parliament. The Bill was immediately referred to the Natural Resources Committee for scrutiny and public consultations. On record, the Committee held over 28 consultations, with groups, individuals and communities. The Committee also conducted fact finding visits to the Albertine region, Australia, Norway and the United States.

The Natural Resources Committee has just presented its report to Parliament and the debate is currently ongoing. We congratulate the Committee for completing its work and presenting the report also it failed to do so within a period of 45 days as stipulated in the rules of procedure of Parliament.

In many ways, there are fundamental flaws The Petroleum (Exploration, Development and Production) Bill 2012. These flaws also run through the two other related bills – The Petroleum (Refining, gas processing and conversion, transportation and storage) Bill 2012 and the Public Finance Bill 2012. However, we address ourselves to the flaws in The Petroleum (Exploration, Development and Production) Bill 2012 which the Natural Resources Committee ought to have addressed to guide the House in enacting a more progressive legislation for the upstream activities in Uganda’s oil sector.

While the Committee outlines the various stakeholders and interest groups consulted during its scrutiny of the Bill, it is striking that the report makes no reference at all nor does it provide the range of issues raised and how the Committee addressed the issues raised. From our perspective as civil society, we can say with certainty that the fundamental issues that we raised are not reflected in the Committee report and have been ignored in its recommendations.

We believe that the Parliament has a constitutional duty to correct the flaws in the current Bill which were also ignored by the Natural Resources Committee. There are at least 6 issues that have to be addressed if Parliament is to meet its test of legislating for the good governance of the oil and gas sector.

I. Parliament cannot abandon its mandate and duty to legislate

By seeking to vest the power to determine the coming into force of The Petroleum (Exploration, Development and Production) Bill 2012 contrary to Article 91of the Constitution, Parliament is negating its legislative responsibilities. The Constitution is very clear on this matter and there are no compelling reasons why Parliament should shift its powers to enact laws to the Executive.

II. Vesting of petroleum rights

The Committee report is silent on the important issue of vesting of petroleum rights. The Bill creates an ambiguity by vesting petroleum rights in the Government on behalf of the Republic of Uganda. Under Article 257 of the Constitution, Government and the Republic of Uganda means one and the same thing. It is apparent that since the constitutional amendments of 2005, there have been attempts to destroy the trust-beneficiary relationship that the 1995 constitution sought to create between citizens and government. Parliament as a guarantor of this trust cannot legislate to destroy that trust by affirming such ambiguity.

III. Institutional framework

One of the major flaws in the Bill is its failure to create an institutional framework that is tailored to the unique nature of the oil and gas sector. This uniqueness is recognized across the board including the National Oil and Gas Policy 2008. All major commentaries prepared on the Bill have raised this issue and it is worrying that the Report of the Natural Resources Committee only tinkers with the sidelines without address the fundamental issues of authority, autonomy, checks and balances, and accountability.

In particular, both the Bill and the Committee Report fail to recognize that the Petroleum Authority should be elevated beyond the traditional authorities. An Authority for regulating oil and gas activities cannot be configured in the same way or be at the same level with other authorities such as those responsible for forests, wildlife, investment promotion, etc. Important safeguards such as parliamentary approval of its Board members and chief executive officers as well as direct reporting ought be introduced in the Bill. The Committee Report fails to provide guidance to Parliament on the need to legislate against ministerial interference and influence peddling in the governance of the Authority.

IV. The National Oil Company

The authors of the Bill failed to provide elaborate arrangements for the governance of the National Oil Company. The Natural Resources Committee in its report fails to address this deficiency in substantial terms and only fiddles with peripheral issues.

V. Transparency, accountability and information disclosure

As the Committee acknowledges, the principles of transparency, accountability and information disclosure as hallmarks of good oil governance cannot be overstated. This is the same spirit articulated in the National Oil and Gas Policy. However, the current Bill’s prohibitive provisions can only be compared to the notorious colonial modeled Official Secrets Act, 1964. We agree with the conclusion of the Committee that the Official Secrets Act “creates barriers to citizen access to a broad range of government-held information and its vague and broad formulation inevitably perpetrates the culture of secrecy and confidentiality. It is therefore absurd that we may end up with legal provisions suited for the colonial period to govern oil resources.

VI. Public participation, oversight and accountability

The National Oil and Gas Policy is very clear on the role that civil society, cultural institutions and other actors can play in ensuring the good governance of the oil and gas sector. It is therefore unfortunate that the authors of the Bill and later on the Natural Resources Committee fails to ensure that specific mechanisms are created to ensure these policy commitments are translated into law. We would therefore like to associate with the Minority Report presented by Hon. Ken Lukyamuzi, MP which proposes that creation of a Public Interest and Accountability Committee.

Finally, we wish to reiterate the fact that the current legislation process presents a window of opportunity for Uganda to take the right course to avoid the oil curse and ensure that our oil resources are exploited sustainably to meet the needs of the present and future generations. The ultimate responsibility rests with our representatives in Parliament. The Report of the Natural Resources Committee fails to meet the test and we hope that the Members of Parliament can move beyond partisan politics and legislate for posterity to create a system of checks and balances where everybody is held accountable for the exercise of their powers and responsibilities regarding the governance of oil resources.

Civil Society Coalition on Oil and Gas (CSCO)

Publish What You Pay Uganda (PWYP)

Advocates Coalition for Development and Environment (ACODE)

International Alert                                         

Global Rights Alert

Anti-Corruption Coalition (ACCU)