Inadequate oil laws a threat to Uganda’s future development-2012

Inadequate oil laws a threat to Uganda’s future development-2012

Inadequate oil laws a threat to Uganda’s future development-2012

Published By Afiego |  March 15, 2012

Uganda’s draft oil laws are inadequate and risk undermining prospects for the country’s future development if passed by Parliament, said a coalition of civil society groups today. The coalition urged Uganda’s government and international donors to listen to serious concerns raised by MPs and civil society and make the laws as strong as possible.

Uganda’s Parliament is currently considering a new set of laws that will lay the ground for how the sector will be governed, including addressing the vital question of who will benefit from the new-found wealth. Recent oil discoveries in Uganda could double government income within six to ten years and constitute an estimated 10-25 percent of gross domestic product at their peak.

“The discovery of oil presents a fantastic opportunity for Uganda but also a huge risk,” said Dickens Kamugisha, Chair of the Oil Watch Network Uganda. “Putting the right laws in place will help Uganda harness its new found wealth to develop and tackle poverty. Poor laws could push the country into a spiral of poor governance, corruption and economic stagnation.”

In their current form, the laws place control over the sector and its revenues firmly in the hands of a few individuals at the top of government. Crucially, they exclude Uganda’s Parliament from having a say over how the sector is run.

The coalition also raised concerns that the lack of any firm commitment to transparency over key contracts and other documents in the draft laws increases the risk of corruption. In addition, weak environmental and social protections, as well as the absence of any measures to include local communities in decision-making processes, increases the potential for human rights and environmental abuses.

“International donors have a role to play here,” said George Boden a Campaigner at Global Witness. “They should make it clear that they cannot continue their support for the Government if it continues to ignore the views of Parliament and Ugandan civil society. Ugandans must not be kept in the dark over how their country’s oil is managed.”

“Important decisions affecting Uganda’s future are being made now. Uganda’s Parliamentarians must take firm action to strengthen these Bills, or risk being complicit in the passage of weak laws that lack any proper safeguards to ensure Uganda’s people see the benefit of the oil beneath their feet,” said Winifred Ngabiirwe, Chair of the Publish What You Pay coalition in Uganda.

Uganda’s oil sector has had a shaky start with a number of high level corruption allegations, government secrecy, land disputes and militarization of the oil region. Several international tax disputes have also overshadowed the sector threatening to cost the people of Uganda hundreds of millions in lost revenue.

In February, the Government pushed ahead with a new agreement with UK-listed Tullow Oil that paved the way for a US$2.9 billion deal between Tullow and energy giants Total and CNOOC. The Government went ahead with the agreement despite a parliamentary resolution calling on it not to execute any new oil contracts before new petroleum laws were passed.

Contact: George Boden at Global Witness on +44 (0)207 492 5899 or +44 (0)7808 767 134.