Uganda Joins Global Body on Oil and Gas transparency

By Arinaitwe Rugyendo

Kampala – Uganda’s oil and gas sector is headed for a period of openness and transparency following the country’s approval as the 54th member of the Extractive Industries Transparency Initiative (EITI) two days ago.

The EITI Board approved Uganda’s application to join the body, making it the EITI’s 54th member country and the 26th in Africa, a statement on EITI’s blog reads.

Uganda applied for membership in July last year following a cabinet approval.

The EITI Board Chair, Rt Hon. Helen Clark, who is also the former Premier of New Zealand, welcomed Uganda to the EITI community: “EITI implementation can help lay the foundation for transparent and accountable management of the country’s natural resource wealth. We welcome Uganda as an implementing country and look forward to the EITI promoting inclusive public debate.”

She followed on this with a tweet on this reporter’s timeline saying she was “Please to welcome #Uganda as newest member of #EITI.”

Founded by former British Premier Tony Blair, EITI is the global standard to promote the open and accountable management of oil, gas and mineral resources around the world.

The founders were guided by the belief that a country’s natural resources belong to its citizens and EITI has established a global standard to promote the open and accountable management of oil, gas and mineral resources, a profile on its website www.eit.org, reads.

Accordingly, the EITI standard requires the disclosure of information along the extractive industry value chain from the point of extraction, to how revenues make their way through the government, and how they benefit the public.

By doing so, the EITI seeks to strengthen public and corporate governance, promote understanding of natural resource management, and provide the data to inform reforms for greater transparency and accountability in the extractives sector. In each of the 54 implementing countries, the EITI is supported by a coalition of government, companies, and civil society.

This means that Uganda’s oil and gas sector is headed for more transparency, soothing bouts of speculation over the past decade that the country’s crude oil was being sold on the black market.

But Peter Muliisa, the Head of Corporate Affairs at the Petroleum Authority of Uganda, tells Red Pepper Digital that Uganda’s oil is still safe.

*Peter Muliisa, the Head of Corporate Affairs at the Uganda National Oil Company*

“Our oil is absolutely safe. We are working hard to get it extracted in the most transparent manner possible. We intend to add value to it and ensure it benefits all Ugandans.”

The EITI reveals further that this new development will require Uganda to publicly disclose information such as contracts, beneficial owners, revenues and payments, including payments related to the environment which in turn will promote public oversight and debate on the sector.

“It makes our oil safe or at least safer. And it makes it more difficult for government officials and their political cronies to abuse this key industry,” tweeted Timothy Kalyegira a senior Uganda journalist.

Participation in the EITI is identified in the Government of Uganda’s 2012 Oil and Gas Revenue Management Policy as an action that will help create lasting value from oil and gas revenues. Proven reserves of over six billion barrels of crude oil have been identified in Uganda, of which 1.4 billion is currently deemed to be recoverable. Total and China National Offshore Oil Corporation (CNOOC) are active in the region and share an interest in license areas in the Lake Albert development project. If managed responsibly, expected oil revenues can contribute to national development plans such as infrastructure and social services.

Uganda’s commitment to join the EITI was first made in the 2008 National Oil and Gas Policy and was reiterated in the updated 2012 Oil and Gas Revenue Management Policy. Participation in the EITI is also identified in the 2019-2024 Domestic Resource Mobilisation Strategy. In January 2019, the Ugandan Government approved the decision to present a candidature application, which was submitted in July 2020.

Uganda’s Minister of Finance, Planning and Economic Development, Matia Kasaija, said: “The decision to join the EITI was informed by the appreciation of the value of transparency as we progress our plans to develop Uganda’s natural resource wealth. We believe that this initiative has the potential to strengthen tax collection, improve the investment climate, build trust among sector stakeholders and help create lasting value from our mineral and petroleum resources.”

As a part of the EITI sign-up process, Uganda formed a multi-stakeholder group (MSG) in March 2019, composed of government, industry and civil society representatives.

Civil society advocacy has been an important part of Uganda’s journey to join EITI.

“Civil society has advocated the operationalisation of the policy objectives of joining EITI since the promulgation of Uganda’s National Oil and Gas Policy in 2008 and the Petroleum Revenue Management Policy in 2012,” says Onesmus Mugyenyi, Deputy Executive Director of Advocates Coalition for Development and Environment (ACODE) and a civil society member of Uganda’s Multi-Stakeholder Group.

“It is, therefore, our pleasure to see that the government has followed through with this policy commitment. EITI implementation provides an opportunity for deepening transparency and accountability in the management of Uganda’s oil, gas and mineral resources. I pledge our total support and commitment in ensuring that the EITI works for Uganda.”

Mr. Muliisa confirms to this website that the multi-stakeholder group is already active and has its secretariat station at Crested Towers in the Kampala Central Business District.

While Uganda’s oil industry is still nascent, Total, a founding member of the EITI internationally and a partner in the Lake Albert Development Project, sees only benefit for Uganda in committing to the EITI. Writing in support of EITI implementation, Total E&P Uganda – an active participant in Uganda’s Multi-Stakeholder Group – underscored the importance of contract transparency in contributing to a transparent and accountable sector.

“We look forward to working with government, industry and civil society partners to support EITI implementation through participation in Uganda’s Multi-Stakeholder Group,” said Total E&P Uganda’s General Manager Pierre Jessua.

Uganda’s initial disclosures in terms of the 2019 EITI Standard will need to be made within 18 months of being admitted as an EITI implementing country.