AG okays disclosure of oil agreements amidst international pressure

The Attorney General, Kiryowa Kiwanuka, has given the Ugandan government a green light to disclose the international oil contracts to the public.

This comes after the oil companies said they have no objections to publicising the oil contracts. Kiwanuka’s advice is likely to be welcomed by civil society and Ugandan citizens who have long called for transparency in the oil and mining sectors. Kiwanuka, in a letter dated July 2, 2024, advised the minister of Finance, Matia Kasaija that he was at liberty to disclose the production sharing agreements (PSAs) if he deemed it appropriate.

In a letter dated July 2, 2024, Kiwanuka advised Finance minister Matia Kasaija that he may disclose the production sharing agreements (PSAs) if he deems it appropriate. This guidance was in response to a letter from Kasaija dated June 1, 2024. However, Kiwanuka’s advice specifically pertains only to contracts with TotalEnergies Uganda and CNOOC Uganda Limited. He cited letters from these companies, dated July 18, 2021, and November 29, 2021, respectively, which confirmed their consent to the disclosure of their PSAs to fulfil the requirements of the Extractive Industries Transparency Initiative (EITI) standard 2.4.

“Therefore, we advise that should you deem it appropriate you are at liberty to disclose the PSAs as prescribed by the EITI standard requirement,” reads the letter copied to the minister of Energy and Mineral Development, state minister for Minerals, deputy attorney general.

The letter was also copied to the permanent secretary/secretary to the treasury, ministry of Finance, permanent secretary ministry of Energy, solicitor general and deputy solicitor general. A member of the civil society who had seen the letter however said it was silent concerning the contracts signed with other companies involved in oil exploration in the Albertine area.

Some of those include DGR Energy Turaco Uganda SMC Limited which is a unit of Australia’s DGR Global and state-owned Uganda National Oil Company (UNOC) and Nigeria’s Oranto. From Kiwanuka’s advice, it appears that the contracts signed with UNOC and mining contracts will remain a secret.

Uganda has been a member of the EITI since August 2020, committing to contract transparency by publicly disclosing the full text of agreements governing the exploitation of oil, gas, and mineral resources. By joining the EITI, Uganda aimed to enhance transparency, strengthen tax collection, promote public debate, improve the investment climate, and create lasting value from its petroleum and mineral resources.

This week, EITI executive director Mark Robinson visited Uganda to assess the country’s progress in ensuring transparency in the oil, gas, and minerals sectors. Robinson was accompanied by Suneeta Kaimal, president and CEO of the Natural Resource Governance Institute (NRGI), which has been instrumental in building the capacity of Ugandan civil society, media, parliamentarians, and government ministries on natural resource governance.

NRGI has supported capacity building of Ugandan civil society, media, parliamentarians, and ministries on natural resources governance, especially in accountability and governance. Robinson and Kaimal on Thursday met the minister of Finance, Matia Kasaijja, and his officers and discussed the progress in ensuring public disclosure of contracts under the extractive sector.

He also met officers from the Attorney General’s office and the key industry players like TotalEnergies and members of the civil society under multi-stakeholder groups (MSGs) hosted at the Uganda EITI secretariat under the ministry of Finance.  Robinson told journalists that his team found it so striking that all the stakeholders in Uganda were committed to the EITI process.

”The EITI seemed to have curved out open space in Uganda for genuine, free, and open debate on these complex issues around the extractive industry,” he said.

RObison’s visit to Uganda follows the validation report on Uganda whose results were released in May 2024. The EITI board said Uganda had achieved a moderate score in implementing the 2019 EITI Standard at 78.5 points. The overall score reflects an average of the three component scores on stakeholder engagement, transparency, and outcomes and impact. On the transparency component, Uganda achieved a fairly low score of 67.5 points. Robinson while meeting the minister raised some of these issues.

“We identified some of the improvements that could be made. He was very receptive. For example, how can contracts further be made open to the public? So there is a process to move towards that goal,” he said.

He confirmed that they discussed making public the audited accounts of Uganda National Oil Company (UNOC).

“He was very receptive to that idea. So I was very struck by their receptivity and recognition from the government to respond positively to some of the recommendations,” added Robinson.

Sources who attended the meeting with the minister said he asked his visitors about what Uganda would gain from its participation with EITI. Robinson said the minister’s question was good because it reconfirmed why Uganda signed up to the EITI. The EITI board had reported that there had been little progress on full disclosures of contracts in the oil sector despite Uganda EITI’s (UGEITI) efforts.

The EITI board also noted that beneficial ownership data was not available though there had been reforms put to create a national beneficial ownership registry. Robinson seemed to have had information to the effect that TotalEnergies and CNOOC Uganda had written no objection letters to the disclosure of the PSAs signed with the government of Uganda.

“Uganda has to demonstrate real progress on making the contracts public. That needs to happen not just those two but across the sector,” he said.

Robinson emphasized the need for Uganda to demonstrate real progress in making contracts public across the entire sector, not just with TotalEnergies and CNOOC. He also called for the creation of a public registry of beneficial owners in the oil, gas, and mining sectors and the reconciliation of discrepancies in gold production data.

“The fourth one is to reconcile some of the discrepancies in the mining data, especially gold production,” added Robison.

Asked why they were insistent on gold data, he said, “It is so important in many countries. And it is one of your major minerals in Uganda that has significant and considerable revenue. That is why gold matters so much than other sectors of the mining,” he said.

Gold, one of Uganda’s major minerals, has been a focal point due to its significant revenue potential. A recent UN report highlighted Uganda, Rwanda, and Burundi as key transit routes for gold smuggled from the eastern Democratic Republic of Congo to Dubai. In Uganda, discrepancies have been noted between gold production figures reported by the Bank of Uganda and those declared by Uganda Revenue Authority (URA) customs.

David Sserwadda, a senior mining inspector, and a member of the Uganda EITI Multisector Group said there is an effort to ensure that different agencies of the government don’t regulate gold exports. He revealed that there had been a meeting with the customs department on how to align gold export in the sense that when it is not cleared, the customs should not allow the export. Uganda has to close some of those before the next EITI board validation commencing on July 1, 2026.

Source: The Observer