Transparency, Accountability and Sustainable Development of the Petroleum Sector - A Call to Action

Posted on: 2023-11-17 11:47:42

Uganda’s petroleum sub-sector has transitioned from the exploration and appraisal phase to the development phase in preparation for the production of the first oil. The Ministry of Energy and Mineral Development has developed the relevant policies, and Parliament has promulgated the required legislation to operationalize the policies. The front-end and engineering designs for a number of infrastructural developments required for oil production and transportation are in advanced stages. One of the key infrastructure developments is the 1,445 Km long East African Crude Oil Pipeline which will run from Hoima in Uganda to Tanga port in Tanzania, for which agreements were signed early this year. Other infrastructure includes the Central Processing Facilities in Buliisa and Kikuube, an International Airport, Feeder Pipelines, and a proposed refinery and access roads among others.

While the National Environment Management Authority (NEMA), the Petroleum Authority of Uganda (PAU), and other relevant government agencies and departments have ensured that Oil Companies undertake Environmental and Social Impact Assessments (ESIAs) for these projects before the commencement of works, and the country has subscribed to the Extractives Industries Transparency Initiative (EITI) which is now under implementation, there are still gaps that must be addressed to ensure transparency, accountability and biodiversity conservation. We, therefore, call upon different and institutions of government to address the following issues to ensure transparency, accountability and mitigate environmental destruction.

1. Ensure access to information by all stakeholders: Besides the highly sought-after oil and gas agreements, which remain inaccessible, there is a need to make more oil and gas-related information, reports, and data more available such as; the approved Environmental and Social Impact Assessment (ESIAs) Reports for oil; Environmental Audit Reports; and Petroleum Cost Audit Reports. Accessing this information will enable other stakeholders to hold the oil companies and relevant agencies accountable and facilitate third-party monitoring of oil and gas developments.

2. Fiscal discipline and proper management of petroleum revenues: While oil and gas revenues and investment in the sector come in windfalls, the government agencies mandated with the management of these revenues ought to exercise fiscal discipline by complying with the laws and regulations relating to these revenues. For example, the Public Finance Management Act clearly states the procedure for drawing revenues from the Petroleum Fund, and the sectors in which these revenues should be invested. However, on several occasions, both the procedure and purpose to which the revenues are put have been flouted. Such fiscal indiscipline out to not only be called out but also action taken against perpetrators.

3. Safeguarding people and the environment in the course of operations: Oil and gas developments, especially those being implemented in ecologically sensitive areas should proceed with due caution and in line with the conditions of the Environmental and Social Impact Assessment Reports. Parliament through its oversight and accountability role must put the relevant government agencies, and oil companies to task, and ensure that the extraction of oil and gas does not adversely affect the environment and the people in the host communities. Monitoring the implementation of ESIAs and receiving and taking action on periodic reports from relevant agencies and ministries should be part of the work of the Natural Resources Committee of Parliament.

4. Put the country first when it comes to Oil and Gas: Notwithstanding the political and ideological differences among the parliamentarians, we enjoin them to know that natural resource governance is a bipartisan issue. For that matter, all legislators need to treat petroleum matters as an overarching issue of national importance that transcends party politics.

5. Pay due attention to the Oil and Gas Bills: The Cabinet recently approved three (3) Bills namely; (i) the East African Crude Oil Pipeline (EACOP) Bill, 2021; (ii) the Income Tax Amendment Bill, 2021; and, (iii) the Public Finance Management Amendment Bill, 2021. The Mining Bill will also soon be tabled before parliament. To this end, the legislative mandate of Parliament is going to be called to bear any time from now. We implore all MPs to review and debate these Bills judiciously, with the best interests of Ugandans at heart.

6. Improve civic space for non-state actors: Besides the freedoms of expression, association, and assembly enshrined in the Constitution, the civic duties of a citizen include the responsibility of holding both government and its agencies accountable. Government should not stifle the efforts of citizens, CSOs, and other non-state actors to participate in the governance of natural resources.