Monday, June 29, 2009

Oil firms and govts to publish all payments

By MICHAEL WAKABI (email the author)
The East African (/

Posted Monday, June 29 2009 at 00:00

Despite adopting the appropriate nationalistic posture about the future of Uganda’s oil programme and the apparent satisfaction by donors with key aspects of the national oil and gas policy, voices that question the ability of President Yoweri Museveni’s government to deliver a clean and accountable oil industry are beginning to emerge.

The doubts being expressed are premised on the failure or refusal, by the government to make public details of the Production Sharing Agreements (PSAs) it has entered with the companies prospecting for oil and the continuing reluctance to categorically commit to the Oslo-based Extractive Industries Transparency Initiative founded by former British premier Tony Blair in 2002 and endorsed by the G8 at their 2004 summit.

While the government argues that the Ugandan programme already meets most of the requirements spelt out under this initiative, members of the political opposition and civil society are reading a familiar pattern where President Museveni says the right things but does little to walk the talk.

And as the temperature begins to rise, the opposition Forum for Democratic Change (FDC) says it is going to petition Transparency International, a watchdog on corrupt deals, to help make the PSAs available to the Uganda public.

Singling out his failure to tame grand corruption in which members of his inner circle are often adversely mentioned, activists say Ugandans will be burying their heads in the proverbial sand, if they expected President Museveni to suddenly turn a new leaf.

“How can he deliver a clean programme when the production sharing agreements are his secret?” asks FDC spokesperson Wafula Ogutu, adding, “Even some Cabinet ministers have not seen what is contained in them and since President Museveni has presided over the robbery of whatever little donor and tax payer money is available, the oil money is just going to be a bonanza for them. We are going to ask the extractive industries initiative of Transparency International to get us these details because they have the capacity.”

President Museveni is currently caught in a standoff with Western oil companies that want Uganda to export crude, while he wants a refinery built in Uganda to form the catalyst for his long held dream of building an industrial economy.

Museveni has recently been to Tehran, Iran, where he secured commitments for financial support to develop an independent oil programme. One of the oil companies has since announced that it was selling off its interest in the blocks where commercially viable oil deposits have been confirmed.

On the other hand, Western donors are holding out hope that with the systematic approach the country has taken towards exploiting its oil resource might just help it escape the pitfalls that have see oil bring more misery that emancipation of citizens in those African countries that earlier discovered the black gold.

And while President Museveni’s stance enjoys popular support among the Ugandan public, with the finer details of revenue sharing pacts still being kept from the public, the civil society is urging caution. Pointing to a history of broken promises over his 23-year tenure as Uganda’s president, they say Museveni’s word cannot be trusted.

“A man is measured by what he says and what he does. For me if Museveni says he has been fighting corruption for the past 23 years but chooses to recycle ministers accused of involvement in corruption instead of sacking them, I have no reason to believe that it will be any different when we begin producing oil,” Jasper Tumuhimbise, the co-ordinator of the Anti-Corruption Coalition of Uganda told The East-African.

Mr Tumuhimbise further argues that failure to involve the Ugandan public and local populations at every stage of the oil exploration programme had denied it legitimacy and sense of local ownership.

“There are two ways of looking at this. One, we are saying that we are a corrupt nation and therefore whichever revenue we get from oil will be misdirected.

The other is about the approach; we have been saying give us the production sharing agreement but this has not been forthcoming. Even if we are not corrupt, the oil curse will come because like Nigeria, local communities have been excluded,” Mr Tumuhimbise argued.

Energy Minister Hillary Onek was not in the country to respond to these charges but speaking to The EastAfrican, Daudi Migereko, his predecessor in the energy portfolio who is now Chief-Whip of the ruling National Resistance Movement in parliament said Uganda had not signed up to the Extractive Industries Transparency Initiative first because the country was preoccupied with negotiating a good deal with the prospectors.

We are aware of it but we did not think it was urgent as we are still occupied with issues of getting the production stream up and running. We were still negotiating with the oil companies and trying to get a good deal, we thought this would simply distract us from more important issues,” said Mr Migereko.

He added: “The decision was that we would look at that later.We took time to study and understand this initiative and discovered that our programme was already compliant with most of their recommendations. We had a good oil policy and what we needed to do was to translate the spirit of that policy into a mineral sector law which I am sure my successor will soon be tabling before parliament.”

Mr Migereko said the other concerns that Uganda had with the initiative was that it appeared to be only targeting African countries because none of the oil producers in the developed north, had signed up for it.
“This turned out to be more of a distraction at a critical time. We would have to pay membership fees on something that was not really a priority at that time,” he said.

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