Africa Institute for Energy Governance Hosts Contract Transparency Workshop

On November 6, the Africa Institute for Energy Governance (AFIEGO) hosted a training workshop in Kampala, Uganda to promote contract transparency in Uganda's oil sector.  The training, sponsored by Revenue Watch with contributions from Publish What You Pay Uganda and the Open Society Initiative for East Africa, brought together a diverse set of actors, including civil society groups, members of parliament and journalists, to promote public disclosure of the country's oil contracts. 

	Lake Albert, seen above from the Ugandan shore, falls within the Albertine Graben area where massive reserves of oil were discovered in 2006. photo: gipukan / Flickr

In 2006 oil was found in Uganda's Albertine Graben, a sedimentary basin straddling the border between the nation and the Democratic Republic of Congo.  This was the first discovery of oil in Uganda and is estimated to be the biggest onshore oil discovery in Sub-Saharan Africa in the past 20 years.  Uganda has two billion barrels of confirmed oil reserves, of which over 800 million barrels are expected to be recoverable.  The Ugandan government has signed a number of production sharing agreements (PSAs) with foreign oil companies as its exploitation plans progress. Unfortunately, these agreements have remained secret, despite provisions of the Ugandan Constitution and the 2005 Access to Information Act. With its training workshop, AFIEGO sought to build participants' understanding of the terms of these PSAs, the importance of contract transparency and the particular issues that arise in developing countries with newfound oil wealth.

Professor Peter Rosenblum of Columbia Law School was the principal facilitator of the workshop. Rosenblum's recent work has focused on the confluence of natural resources and human rights issues around the world, particularly emphasizing mining and oil contracts in Africa.  He is also co-author, with Revenue Watch Institute Legal Fellow Susan Maples, of RWI's report Contracts Confidential: Ending Secret Deals in the Extractive Industries, released earlier this year.

In addition to contract transparency, the workshop also highlighted concerns about the lack of legal infrastructure to manage oil exploration, production and revenues. Rosenblum described the example of Chad, a country which he said demonstrates that it is much easier to extract and produce oil than it is to develop a legal and social infrastructure to manage the process. 

In 2008, Uganda enacted an Oil and Gas Policy to govern its newly found resource. By all accounts the new policy creates good guidelines, but these have yet to be implemented.  The Ministry of Energy and Mineral Development is said to be drafting an oil law now, but that process has remained closed to civil society input, and the law will not be made public until the Ministry submits it to parliament. Not even Winnie Masiko, Chairperson of the parliament's Natural Resources Committee, has seen the draft. In her keynote speech at the Revenue Watch workshop, Masiko echoed concerns about the country’s legal infrastructure, noting that parliament should enable civil society to have a role in the lawmaking process and in oversight of Uganda's oil production.

The workshop gave Revenue Watch an important opportunity to speak directly with MPs about the challenges they face managing resource production and revenues over the longer term to facilitate nationwide development.  Revenue Watch hopes to support further capacity-building in this area, to ensure that MPs are equipped with the specialized tools necessary for effective oversight.

At the workshop, Nelly Busingye, an RWI-AFIEGO fellow, presented research on the relevance of contract transparency in the implementation of the Extractive Industry Transparency Initiative (EITI).  To date, Uganda has neither signed on to become an EITI candidate, nor disclosed its contracts. Busingye's research compared case studies from Nigeria and Azerbaijan, and highlighted the important role of contract transparency in fostering the accountable governance of extractive resources.  For a new oil state like Uganda, such lessons from other resource-rich countries are a valuable roadmap in developing an effective legal framework.

LEARN MORE

• In Uganda, NGOs Make Progress on Oil Issues Despite Government Unease
• Contracts Confidential: Ending Secret Deals in the Extractive Industries
• UGANDA: Civil Society Engagement in the Ongoing Oil Exploration