New Vision (Kampala)

9 November 2012

Uganda: MPs Disagree On Oil Penalties

The standoff between Parliament and the Executive over contentious clauses in the Oil bill appear to be ebbing as it returned to the floor for a ... ( Resource: Uganda Legislators Clash Over Oil Regulations

MPs have disagreed on the penalties against companies or individuals who will carry out unauthorized oil extraction or extract beyond what they are permitted.

The MPs were debating the petroleum exploration, development and Production Bill following a proposal to amend clause 6. Western Youth MP Gerald Karuhanga who made the proposal argued that oil companies would not comply with the proposed law if the sanctions were light in nature.

Energy minister Irene Muloni however objected to the amendment arguing that harsher penalties were likely to scare away investors.

Article 1 of the clause states that "petroleum activities in, on or under any land or waters in Uganda or subject to Uganda jurisdiction, shall not be conducted without an authorization, license, permit or approval issued in accordance with this Act."

The proposed punishments in clause 6 (2)a and b are a fine of ten thousand currency points(sh200m) for an individual and sh2b (one hundred thousand currency points) for a company.

Karuhanga had proposed a penalty of sh200b for the any company that will extract Uganda's oil illegally. The deputy speaker Jacob Oulanyah ruled that the issue be subjected to discussions.

The MPs also had a heated debate on clause 5 and eventually agreed to change the wording of the clause from on behalf of the Republic of Uganda to on behalf of the citizens of Uganda.

The deputy attorney general Freddie Ruhindi had objected to the amendment which was proposed by Sam Otada seconded by Busiro East MP Medard Lubega.

The opposition shadow attorney general also moved a proposal for amending clause 7 and clause 9 to take away powers give licenses and negotiate oil deals from the energy minister to the Petroleum Authority of Uganda.

Among other functions, Clause 9 gives the minister powers to grant and revoke licenses, negotiate and endorse petroleum agreements.

"Oil businessmen are the dirtiest in the world. Some people have even lost their lives because of their dubious games. There is no way a nation's oil wealth can be subjected to the judgment of one individual who can easily be compromised.

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