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Stop! Civil society objects to first competitive bidding round

Today, a group of nine civil society organisations working in Uganda released a joint statement expressing concern over the decision by the Government of Uganda to continue with the planned bidding round for six oil blocks despite the absence of critical regulatory institutions and mechanisms required by law.

Energy Ministry Permanent Secretary, Kabagambe Kaliisa at the launch of the licensing round in Kampala. (Photo: F. Nalubega)

Energy Ministry Permanent Secretary, Kabagambe Kaliisa at the launch of the licensing round in Kampala on 24 February 2014. (Photo: F. Nalubega)

The statement, whose timing coincides with the government’s official opening of the country’s first bidding round for oil blocks in the oil-rich Albertine Graben, decries the absence of critical infrastructure to oversee the bidding and licensing process.

“While the government has decided to move ahead with the new allocation round, and the refinery and pipeline development, it has failed to pursue the implementation of the petroleum laws with the same vigour,” reads the statement.  “The institutional and regulatory environment is currently lacking in many important ways and we therefore do not have confidence that this bidding round can be carried out in accordance with the obligations of the law or meet basic international standards for free, fair and competitive allocation.”

The statement goes on to point out many key components of the Petroleum (Exploration, Development and Production) Act 2013 that have not been implemented or created like the National Petroleum Authority, yet they are mandated to oversee processes that are occurring or have already occurred. In the law, the Petroleum Authority has the pivotal role of guaranteeing oversight and accountability during the allocation process.

“If the Authority is not operationalised soon, the oversight body will miss an important part of its mandate and risk becoming yet another shell oversight body that is referred to only on paper but not utilized in practice,” the statement reads. The civil society organisations note that since appointing board members to the Authority in 2014, no information has been shared with the public regarding any subsequent progress to fully establish the body.

They also call upon government to publish the model Production Sharing Agreement which should form the basis of all company bids and publish the set of regulations to be used to dictate the bidding and allocation process as well as the criteria to be used to inform the government’s decision in final allocations.

According to the statement, all of these things should be completed before the government opens the next bidding round if it is to be carried out in accordance with the obligations of Uganda’s laws or meet basic international standards for free, fair and competitive allocation.

Read the full statement here.

 Report by Kathleen Brophy

Extractive Industries Program Officer at Transparency International Uganda

editor@oilinuganda.org