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Showdown looms as government moves to reclaim power over oil

Image: ActionDealyed

Ugandan NGOs shut down in protest at government corruption on the same day that parliament voted to curtalil ministerial power over oil. But Mr. Museveni has bounced back with deals to keep his parliamentary troops in line. (Photo: NY)

A controversial clause in Uganda’s Petroleum (Exploration, Development and Production) Bill, which was amended during a parliamentary debate two weeks ago in such a way as to limit ministerial powers, has been re-introduced at the eleventh hour and will again be debated on Tuesday, November 27, after intense efforts by the ruling party to quell potential rebellion in its own ranks.

A National Resistance Movement caucus meeting held today (November 26) was widely seen as an attempt to railroad Movement MPs into supporting the original version of the bill, while civil society activists held their own press conference and issued statements denouncing the effort to overturn the earlier amendment.

“Stop parliament giving oil to an individual [the minister in charge of petroleum],” runs the headline of a statement issued by a consortium of Ugandan NGOs and civil society alliances.  The statement goes on to argue that “The vesting of control of the whole sector in an individual who is a presidential appointee is, in essence, handing over power to the sitting president to manage the petroleum resource as he or she fancies.”

Clause 9 of the original Bill gave the minister responsible for petroleum exclusive authority to negotiate, grant and revoke exploration and production licences, to issue policy and regulations, and to approve field development plans.  Many Ugandan and international observers saw this as an excessive concentration of executive power, a greater administrative burden than any individual could manage in practice, and a potential invitation to bribery and corruption.  Better, it was suggested, for appropriately qualified technocrats in the proposed Petroleum Authority to take charge of licensing, with ministerial or parliamentary oversight.

In a November 12 parliamentary debate—after months of public consultation on the draft law, and a veritable flurry of MPs’ workshops, caucuses and back-room negotiations as the bill finally came up for a second reading—Clause 9 was substantially diluted.  Powers over licensing and field development plans were passed to the Petroleum Authority, although the minister was left to sign off on deals by issuing a certificate of approval.

Advocates of greater checks and balances in decision making over natural resources claimed this as a famous victory.  “It is our greatest day” Hon. Theodore Ssekikubo  (NRM, Lwemiyaga County, Sembabule), who chairs the  Parliamentary Forum on Oil and Gas, told Oil in Uganda  at the time.

Anti-corruption dimensions

That vote took place at a time when the Government of Uganda was smarting from the suspension of aid from Denmark, Norway, Ireland and the UK over the apparent embezzlement of donor funds meant for post-war reconstruction in the north of Uganda.

On November 12, the day of the parliamentary vote, many NGOs in Uganda, including the national branch of ActionAid International, launched a “week of mourning” and closed their offices for the day to protest against “thieves in government.”

“[MPs] were well aware of the corruption issues in the background and that definitely influenced the vote,” according to one donor organisation representative.

Economic analysts have attributed the recent slide in the value of the Ugandan shilling to the corruption scandal, which has undermined confidence in the government and the currency.

Whilst many Ugandans have deplored embezzlement of international funds, in a string of scandals ranging from the 2007 Commonwealth Heads of Government Meeting to the present day, some observers sensed a new determination to crack down on possible abuse of Uganda’s own resources.

However, two weeks is a very long time in politics and, on November 22, the ruling party moved that Clause 9 be re-incorporated into the bill in its original form, and the Speaker ruled that the matter be debated on November 27.

Acid test for parliament

Several commentators have interpreted debate over management of Uganda’s oil resources both as a proxy for wider governance issues and as a forum for younger politicians, who are aware that President Museveni cannot remain in power for ever, to jostle for public prominence.

October 2011 saw a prolonged, stormy and often theatrical parliamentary debate over oil, in which Speaker Rebecca Kadaga—widely tipped as a possible successor to Mr. Museveni—allowed the formation of an ad hoc parliamentary committee to investigate allegations of bribery and corruption in the sector.

The committee produced no evidence to substantiate the corruption allegations, but its investigations ranged widely over the oil sector.

Since February, 2012, when two petroleum bills were first tabled in parliament, dozens of civil society and parliamentary workshops have considered the draft laws. The parliamentary Natural Resources Committee, charged with reviewing the bills, received scores of submissions from civil society organisations and special-interest groups, including the oil industry lobbying organisation, the Uganda Chamber of Mines and Petroleum.

Optimistic observers saw these as healthy developments: the widening of public debate, and the sharpening of some MPs’ understanding of the oil industry.  Parliamentary debate has been led by a group of MPs who “really grasp and own the issues,” according to the donor representative quoted above.

But will the final result be a re-alignment of state power between the NRM executive and the NRM dominated parliament, or was November 12 only a Pyrrhic victory?  Tomorrow, perhaps, will tell.


Report by NY.