Citizens should be empowered to understand the oil and gas industry

Uganda’s new oil and gas industry has brought with it new phrases, one of which is ‘national content sometimes called local content’. I had never heard usage of the term until recently when, like other Ugandans, I picked interest in knowing what is going on in our oil and gas sector. My strenuous research efforts, however, I have found no precise explanation of the phrase.

Nonetheless, national/local content is generally understood to mean all attempts to ensure that local communities/natives and the private sector actively, competitively and commercially get involved and participate fully in an economic project- in this case the oil and gas sector. Building local/national content entails so many things. It includes but is not limited to; hiring host country nationals, expanding opportunities for minority e.g. oil companies purchasing from minority- and women-owned businesses, promoting skills training and development amongst nationals, supplier development which should start in the early stages of the project life cycle and continues to evolve throughout the life of the operation, strategic community investments, environmental management/protection, shareholder communication, etc.

By establishing and supporting comprehensive programmes in these areas and others unmentioned, extractive industries/oil firms, it is expected, will help build the capacity of citizens and sustain economic growth way beyond the life cycle of the oil project(s) in Uganda.

Critical to note is that rewarding local content development should involve the participation of all the stakeholders and allow the present generation to meet its needs, without necessarily compromising the future generations’ abilities to meet their own. Local/national content explained thus far, I now turn to the main subject of the article-how national/local content can best be promoted in light of Uganda’s oil and gas sector.
Make the access to information affordable. At the height of the oil debate in October when Parliament sought to access oil contracts between government and oil companies, citing the main law that regulates the oil sector i.e. the Petroleum Exploration and Production Act (1985) revised in 2000, government argued that it was obligated not to disclose the aforementioned contracts, though it later claimed the agreements had been brought to the floor of Parliament much earlier.

Whereas section 3 (a) of the 2005 Access to Information Act spells thus: The purpose of this Act is to promote an efficient, effective, transparent and accountable government, and whereas access to information is not only a constitutional right but also key to participation, hindrances to accessing information such the access fee conditionality in this Act is hugely limiting the locals’ attempts to seek for information, consequently curtailing their participation and more crucially denying them the opportunity to hold the government accountable. To this end therefore, I propose that the current laws be reviewed to ensure there is unobstructed flow of information.

Empower citizens through ensuring the highest degree of fairness and transparency in oil-related activities. For example, the procurement of goods and services by oil companies should target local service and support companies, (turning to foreign procurement, only when the local market has failed to satisfy the demands), solicitation for and management of bids and hiring of employees should be fair and competitive and the management of oil proceeds, as much as possible, be disclosed to the principal owners of the resource.

According to International Alert, a London based international NGO working to prevent and end violent conflict across the globe, two initiatives i.e. Publish What You Pay and Extractive Industries Transparency Initiative are useful in aiding proper management of oil revenues. These advocate and call for the disclosure by extractive firms of the payments they make to host governments for accessing their ‘natural resource jackpots’ and of government revenues accruing from the extractive firms.

Uganda’s participation in these initiatives, I am sure, would send a reassuring signal about its pledge to transparency in the oil and gas sector considering the level of suspicion and apprehension citizens have of government because of the cancerous corruption obtaining in the country.

Lastly, as mentioned earlier, national/local content development includes quite a lot that this piece has by no means narratively covered for lack of space. In summary, however, as stipulated in objective (10) of the National Oil and Gas Policy (2008): ensuring mutually beneficial relationships between all stakeholders in the development of a desirable oil and gas sub-sector for the country is very key to developing local/national content.

By Santo Asiimwe

Mr Asiimwe formerly taught Organisational Studies at Makerere University.

Daily Monitor