Uganda Joins the Extractive Industries Transparency Initiative (EITI)

These past few months have brought significant changes and exciting new opportunities in some of the areas we have been working for many years. August 12, 2020, saw the monumental approval of Uganda's application to join the EITI, making it the 54th country implementing the EITI's globally and the 26th in Africa. The Government of Uganda's 2012 Oil and Gas Revenue Management Policy identifies the implementation in the EITI as essential to creating lasting value from oil and gas revenues.

GRA welcomes this news, as we have long advocated for the government and the private sector to implement the EITI for close to six years. Over recent years, we have engaged in meaningful discussions and dialogue around the EITI implementation to deepen transparency and accountability in managing Uganda's mineral and petroleum resources. GRA has been at the heart of these conversations, working closely with civil society representatives to advocate for Uganda's admission to the EITI. We have been substantively involved in the EITI sign up process, including but not limited as a member of Uganda's multi-stakeholder group overseeing the country’s EITI implementation. Winfred Ngabiirwe, GRA Executive Director, is an elected member of the CSO constituency.

EITI implementation requires Uganda to disclose information from mining operations and extractives companies throughout the value chain. This includes information on companies given the right to mine or drill, the terms of those contracts, tax, and royalties paid by companies, and incentives for investors and government revenues and other impacts – such as social and environmental impacts of extraction – being monitored and managed. Fiscal gains from oil and gas resources can have a profound economic and social impact on our country. Governments receive income from oil and gas through two main routes: fuel taxes earned on retail fuel sales (e.g., excise tax and VAT) and through revenues from upstream oil and gas activities (including royalties, corporate taxes, and service fees). If managed responsibly, expected oil revenues can contribute to national development plans by financing much-needed investments in critical infrastructure and social services and impacting job creation for youth throughout a country.

However, transparency is key to ensuring that fiscal revenues from oil and gas resources are not mismanaged or lost for corruption, misuse, and leakages. Ensuring transparency and accountability in the sector will be vital to ensure corruption does not compound existing inequalities. These disclosures are critical for the public interest, particularly since the general public’s understanding of government revenues over time can, in turn, foster public oversight and public debate and inform the choice of appropriate and realistic options for sustainable natural resource development.

EITI implementation is vital to the public interest, mainly since access to information enables citizens to understand how oil and gas companies' plans and operations may affect their rights to life, health, and an adequate standard of living. GRA regards the right to access information, the right of participation in decision-making, and the right to remedy, including access to justice, critical to Uganda's quest to ensure extractives resources benefit all citizens. Access to information is a crucial prerequisite for meaningful participation and realization of the EITI ideals.

The rapid transition from the Ugandan Government deciding to tender in an EITI candidature application in January 2019 to the formation of a multi-stakeholder group (MSG) composed of government, industry, and civil society representatives as a part of the sign-up process in March 2019, to submission of the application in July 2020 attest to a growing appreciation of the value of improving transparency in the development of Uganda's natural resource wealth.

On paper, becoming an EITI implementing country is a significant milestone for our country in itself. However, meeting this will require sustained political commitment and willingness to tackle the well-known governance shortcomings that have long held back the oil sector's development. These include strengthening tax collection, improving local participation in the industry, building shared value among sector stakeholders, and enforcing environmental and social safeguards.

Despite this promising beginning, there is a lot of important work ahead in ensuring citizens’ active participation in implementing, monitoring, and evaluating the EITI process. Citizens' ability to use the EITI process’s information is a crucial requirement to ensure that the transparency created by the EITI leads to greater accountability.

As our Executive Director, Winnie, rightly pointed out, "The window has opened up, and there's going to be lots of information regarding the sector, the big question is whether Ugandans will be able to make use of this important information to create meaningful reforms at all levels."

As we move forward, we recognize the need to accelerate this work. We are committed to our mission to empower communities to inform and utilize accountability mechanisms like the EITI to ensure they work in citizens' best interests. We believe long-term sustainable and equitable management of our natural resources is impossible unless local communities are on board. We will continue to work with and strengthen local communities' meaningful engagement and influence over decision-making in the EITI implementation process from their communities to the national stage.

In part, civil society with access to information can interpret and mobilize to effect change. Increased knowledge among the public demands better resource governance, which invariably improves natural resource governance.

These past few months have brought significant changes and exciting new opportunities in some of the areas we have been working for many years. August 12, 2020, saw the monumental approval of Uganda's application to join the EITI, making it the 54th country implementing the EITI's globally and the 26th in Africa. The Government of Uganda's 2012 Oil and Gas Revenue Management Policy identifies the implementation in the EITI as essential to creating lasting value from oil and gas revenues.

GRA welcomes this news, as we have long advocated for the government and the private sector to implement the EITI for close to six years. Over recent years, we have engaged in meaningful discussions and dialogue around the EITI implementation to deepen transparency and accountability in managing Uganda's mineral and petroleum resources. GRA has been at the heart of these conversations, working closely with civil society representatives to advocate for Uganda's admission to the EITI. We have been substantively involved in the EITI sign up process, including but not limited as a member of Uganda's multi-stakeholder group overseeing the country’s EITI implementation. Winfred Ngabiirwe, GRA Executive Director, is an elected member of the CSO constituency.

EITI implementation requires Uganda to disclose information from mining operations and extractives companies throughout the value chain. This includes information on companies given the right to mine or drill, the terms of those contracts, tax, and royalties paid by companies, and incentives for investors and government revenues and other impacts – such as social and environmental impacts of extraction – being monitored and managed. Fiscal gains from oil and gas resources can have a profound economic and social impact on our country. Governments receive income from oil and gas through two main routes: fuel taxes earned on retail fuel sales (e.g., excise tax and VAT) and through revenues from upstream oil and gas activities (including royalties, corporate taxes, and service fees). If managed responsibly, expected oil revenues can contribute to national development plans by financing much-needed investments in critical infrastructure and social services and impacting job creation for youth throughout a country.

However, transparency is key to ensuring that fiscal revenues from oil and gas resources are not mismanaged or lost for corruption, misuse, and leakages. Ensuring transparency and accountability in the sector will be vital to ensure corruption does not compound existing inequalities. These disclosures are critical for the public interest, particularly since the general public’s understanding of government revenues over time can, in turn, foster public oversight and public debate and inform the choice of appropriate and realistic options for sustainable natural resource development.

EITI implementation is vital to the public interest, mainly since access to information enables citizens to understand how oil and gas companies' plans and operations may affect their rights to life, health, and an adequate standard of living. GRA regards the right to access information, the right of participation in decision-making, and the right to remedy, including access to justice, critical to Uganda's quest to ensure extractives resources benefit all citizens. Access to information is a crucial prerequisite for meaningful participation and realization of the EITI ideals.

The rapid transition from the Ugandan Government deciding to tender in an EITI candidature application in January 2019 to the formation of a multi-stakeholder group (MSG) composed of government, industry, and civil society representatives as a part of the sign-up process in March 2019, to submission of the application in July 2020 attest to a growing appreciation of the value of improving transparency in the development of Uganda's natural resource wealth.

On paper, becoming an EITI implementing country is a significant milestone for our country in itself. However, meeting this will require sustained political commitment and willingness to tackle the well-known governance shortcomings that have long held back the oil sector's development. These include strengthening tax collection, improving local participation in the industry, building shared value among sector stakeholders, and enforcing environmental and social safeguards.

Despite this promising beginning, there is a lot of important work ahead in ensuring citizens’ active participation in implementing, monitoring, and evaluating the EITI process. Citizens' ability to use the EITI process’s information is a crucial requirement to ensure that the transparency created by the EITI leads to greater accountability.

As our Executive Director, Winfred, rightly pointed out, "The window has opened up, and there's going to be lots of information regarding the sector, the big question is whether Ugandans will be able to make use of this important information to create meaningful reforms at all levels."

As we move forward, we recognize the need to accelerate this work. We are committed to our mission to empower communities to inform and utilize accountability mechanisms like the EITI to ensure they work in citizens' best interests. We believe long-term sustainable and equitable management of our natural resources is impossible unless local communities are on board. We will continue to work with and strengthen local communities' meaningful engagement and influence over decision-making in the EITI implementation process from their communities to the national stage.

In part, civil society with access to information can interpret and mobilize to effect change. Increased knowledge among the public demands better resource governance, which invariably improves natural resource governance. We wish Uganda a fruitful and succesful EITI implementation.