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Analysis: New law fails to ease oil concerns in Uganda


IRIN NEWS

KAMPALA/NAIROBI, 13 December 2012 (IRIN) – Uganda’s parliament recently passed a law to govern the exploration, development and production of the country’s estimated three billion barrels of oil, a resource whose extraction will directly affect the livelihoods of tens of thousands of people.

While the law streamlines the burgeoning industry, analysts have raised concerns over transparency and over who controls the sector.

“The new law helps set clear guidelines under which the oil sector is to be run and managed, and makes clear who is in charge of what roles,” said Tony Otoa, director of Great Lakes Public Affairs (GLPA), a Uganda-based think tank focusing on oil and governance. “However, there are some concerns about transparency and too much power within the oil industry in the hands of the president.”

The bill was passed on 7 December after weeks of wrangling over its controversial Clause 9, which gives the energy minister wide-ranging powers, including authority over the granting and revoking of oil licenses, negotiating and endorsing petroleum agreements, and promoting and sustaining transparency in the petroleum sector. Many members of parliament (MPs) felt these powers should be held by an independent national oil authority.

“Essentially, the standoff, which has ended, was about the withdrawal of trust from a government that is battered by corruption scandals. Also the way the cabinet operates is that, in the past, the feeling has been that some key ministries, like finance, are effectively run by the presidency after being stuffed by yes-men or -women. The pushback against Clause 9 also comes as the Central Bank opened its vaults to a large withdrawal in 2010 [US$740 million to buy six fighter jets] only for approvals to be sought retrospectively,” said Angelo Izama, a Ugandan journalist and oil sector analyst.

“Loss of trust”

“This loss of trust is behind the resistance to greater control by the executive,” he added. “The executive has not been a bad shepherd of the process so far. Uganda’s negotiating position has been tougher with the oil companies, ironically, without the oversight of parliament. However, public scandals elsewhere have negatively affected the ability of the president to convince lawmakers – especially of his party – that he means well.”

A number of donors – including the UK and Ireland – recently suspended aid to Uganda following allegations of deep-rooted corruption in the Office of the Prime Minister. The prime minister, the former energy minister and the foreign affairs minister were all accused of taking kick-backs from oil companies in 2011, charges that remain unproven but that nevertheless damage the reputation of the government.

“The country lacks trust in the state… Institutions and officials have lost legitimacy, and for such an important bill to vest too much power into a political appointee is a recipe for disaster,” said Stephen Oola, a transitional justice and governance analyst at Uganda’s Makerere University Refugee Law Project.

“Granting and revoking licenses and negotiations are technical in nature. We need an independent commission or authority made up of people of good competence, technical ability and experience, and good morals to guard our oil,” said Frank Gashumba, a local businessman and social activist.

Proponents of Clause 9 say licensing powers are safer in the hands of the cabinet than under an oil authority. “The authority is open, easy to bribe and manipulate. Cabinet is bigger than the authority – members of the executive are answerable to Ugandans because they are elected leaders,” said Kenneth Omona, a ruling party MP.

Those opposed to it say they will challenge the law, which was passed with 149 votes in favour and 39 against; some 198 MPs did not turn up to vote.

“The fight is not complete; the passing of the bill is liable to be challenged in courts of law,” said Theodore Ssekikubo, ruling party MP and chair of the parliamentary forum on oil and gas. “If we fail to go to court, we shall subject the matter to a referendum for all Ugandans to pronounce themselves on this strategic resource. We want to ensure transparency and accountability in the oil sector.”

Transparency

There are also concerns about the law’s confidentiality clause, which limits the amount of information accessible by the public.

“The law is lacking transparency – it imposes confidentiality on officials working within the sector, even after they leave office, so there is no opportunity for whistle-blowing or for the public to have access to information on, say, production-sharing agreements,” GLPA’s Otoa said.

He noted that Uganda still hasn’t joined the Extractive Industries Transparency Initiative (EITI), an international scheme that attempts to set a global standard for transparency in oil, gas and mining, further compounding the sector’s lack of transparency. As a member of the EITI, Uganda and oil companies involved in the country would be required to publish all payments and revenues from the industry.

While Total and the China National Offshore Oil Corporation (CNOOC), two of Uganda’s major oil partners, are listed on Wall Street and are therefore subject to the Dodd-Frank Wall Street Reform and Consumer Protection Act – which requires disclosure of payments relating to the acquisition of licenses for exploration and production of oil, gas and minerals – the Irish firm Tullow Oil, another of Uganda’s main oil partners, is not under any similar obligations.

“I am worried we [legislators] and the public can’t access and scrutinize these agreements. You can imagine the recently negotiated and signed oil agreements have not been accessed by the public, not even by members of parliament,” Beatrice Anywar, former shadow energy minister, told IRIN.

The impact of the oil sector has so far been most acutely felt by communities around Lake Albert, thousands of whom have had to move – some willingly and some forcefully – to make room for an oil refinery, which is expected to take up 29sqkm and displace some 8,000 people.

Land issues

“The government is prosecuting the refinery resettlement by the book. However, managing public expectations and the process of multiple decision makers in Uganda’s complex land legal system [Uganda has multiple land systems, including customary, leasehold and freehold] has contributed some volatility to the process… What is adequate compensation? And who determines that? Is it the market or should this be done by the government?” said journalist Izama.

“As a partner to the oil companies, it’s questionable too if the government can make the best decisions for the affected people as it would look to keep project costs fairly low,” he continued. “It is still a dilemma which is jurisprudential as well as political.”

He noted that much of the oil is in game reserves and a sensitive basin with lakes, rivers and a rare biodiversity, and borders the Democratic Republic of Congo, which could also pose challenges for peaceful production; there has already been some tension between the two countries over their boundaries within Lake Albert.

“The process of consensus-building is still weak, and regardless of how it’s arrived at, displacements will create uncomfortable realities, including land and job pressure.”

According to Otoa, Uganda’s lack of a comprehensive land policy makes compensation issues more complex. “We need clear land policies to ensure people are properly compensated – there is a Resettlement Action Plan in place, but it has not been implemented, and a draft land policy has not been actualized, leaving these communities vulnerable,” he said.

He noted that the lack of education among the local population, both in the oil-rich areas and the rest of the country, had contributed to the continued problems in the sector.

“We have focused too much on educating MPs on the implications and importance of good oil governance. We need to move to people-centred approaches and encourage dialogue in the public sphere, which will lead to people demanding accountability from their MPs and the government,” he added.

Ultimately, Izama said, responsible actions by the government will be the difference between Uganda’s oil making a significant impact on the country’s economy or causing conflict and greater poverty.

“Pressure on public institutions prior to commercial oil production is an effective way of counteracting the resource curse. If this public engagement falters, if the transition [from President Museveni to his successor] is volatile, some of the scenarios of the so-called oil curse are possible,” he said. “Overall the tensions are high, but responsible actions by public and political institutions like the past debate show progress is possible.”

SENEGAL: Overfishing – culprits and consequences


 

IRIN

DAKAR, 18 July 2012 (IRIN) – Senegal stopped renewing agreements allowing European fishing vessels in its waters in 2006, but now an expanding artisanal fleet and local industrial boats enjoying exclusivity under lax regulations are being blamed for malpractice and degrading the country’s main economic and food resource.

“In terms of environmental degradation, the responsibility is shared. Artisanal fishermen are responsible for habitat destruction. Although industrial vessels and foreign ships are often blamed, artisanal fishermen contribute hugely to the disappearance of species,” said Moustapha Thiam, the director of Senegal’s Maritime Fishing Authority, a Fisheries Ministry department.

Foreign industrial trawlers are often criticized for overfishing off the West African coast, where some governments are also accused of issuing unregulated licences that overlook the consequences to local economies and livelihoods.

Industrial fishing has really reduced. Small-scale fishing is quite dynamic,” Thiam told IRIN. Of the 409,429 metric tonnes of fish caught in 2010, artisanal fishermen contributed 370,448 tonnes, according to the Maritime Fishing Authority.

Fishing is Senegal’s foremost economic activity, employing around 15 percent of the workforce – about 600,000 people – and is the main foreign currency earner. Local consumption is 28kg per person per year, twice the world average, and 75 percent of protein in the diet comes from fish.

The UN Food and Agriculture Organization (FAO) estimates that there were around 16,000 small fishing boats in Senegal in 2011, compared to about 5,000 in 1982. [Situation de l’immatriculation des embarcations de type artisanal]

“It is the sector with the biggest socio-economic impact locally,” said Ahmed Diamé, a Greenpeace Africa oceans campaigner. “Among the problems are the use of the wrong net size and dynamite… With free access to the resource, [artisanal] fishing has significantly increased. We have noted a reduction in catches since 2000. There is also a decline in the quality of fish caught – they are smaller,” he noted.

To boost the sector, the government subsidizes fuel and equipment for the local fishermen. “What needs to be revised is the quest for short-term profit. This is what drives the sector and what kills it. There is free access to the resource because fishing is not regulated,” said Papa Gora Ndiaye, secretary general of West Africa Fishing Policy Network (REPAO), a regional NGO.

“When we were kids, we could see big fish caught. But nowadays, we need to go very far to catch anything,” said Yakhya, a fisherman in Soumbédioune, one of the fishing ports along the shores of Senegal’s seaside capital, Dakar.

In the days when local boatmen navigated by instinct, returning to a rich spot happened by chance. “There is no more mystery. When I was young, if you found a good spot, it could take a few days to find it again,” said retired fisherman Papa Nguer. “Now all the boats have GPS [global positioning system].”

The government is trying to regulate the sector, registering and controlling the licences issued to local fishermen, but critics argue that these measures are not enough in a country where fishing is the main source of income for millions.

“The state has to decide to reduce the fishing capacity. It is useless to have fishing permits if the fishing fleet is untouched,” said Gaoussou Guèye, the head of a local association for responsible artisanal fishing.

“There are subsistence and economic issues at stake. The problem is to control without generating social catastrophes,” said Captain Djibril Diawara, the head of operations at the Fishing Monitoring and Protection Authority (DSPM).

Few industrial vessels have ventured into territorial waters since Dakar stopped renewing Fishing Partnership Agreements with the European Union. Now, the industrial fishing fleet is mainly local, others in joint venture with Europeans and there have been accusations of corruption and favouritism.

Authorities say the fleet is mostly old, poses environmental risks and often fishes in protected areas. The DSPM has six boats, none of which can reach the high seas, a plane that has been under repair for two years, and a staff of 150.

“It is an aging fleet. Most boats are more than 30 years old, which means they have more destructive fishing practices,” said the Maritime Fishing Department’s Thiam.

With the support of a programme funded by the World Bank, the government plans to reduce the number of artisanal boats by 25 percent and ground the old industrial fishing fleet, Thiam said.

Implementing the plan will be arduous. “Suggesting that the state should stop subsidizing fishermen to reduce fishing capacity raises questions about the risk of fish becoming more expensive for the Senegalese people,” said Greenpeace’s Diamé.

”Experts call for sustainable fishing and environmental protection. “The industry should be bolstered, providing it with means to use the resources in a sustainable and profitable manner.” He called for the creation of marine reserves in the high seas where fishing is banned.

“Fishing and the number of fishermen should be reduced,” Guèye said. “Not everyone can be a fisherman or a fishmonger. There should be a fisheries management plan – we cannot have congestion,” he suggested.
“It is up to the government to set up these plans. It has the responsibility to manage the resources for the future generation.”

 

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