13 November 2012

Uganda: Oil Exploration - Minister's Wings Clipped

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 )

Parliament has significantly clipped the powers of the minister in the proposed oil resource management law.

As the debate continues on the provisions of the Petroleum (Exploration, Development and Production) Bill 2012, some functions were handed over or shared between the minister and the Petroleum Authority of Uganda.

The legislature also assigned itself powers to monitor the management of oil resources. It will approve members of the authority (appointed by the President) and also supervise activities of the National Oil Company.

The energy minister, Irene Muloni, on Monday opposed reduction of her powers but was overrun as Parliament, presided over by deputy speaker Jacob Oulanyah, appeared to adopt a bipartisan approach.

In the draft Bill, Government had proposed that the Minister "shall be responsible for granting and revoking licences, negotiating and endorsing petroleum agreements and approving field development plans." However, MPs argued that this would be handing the minister so much power which are susceptible to being abused.

Abdu Katuntu, the shadow attorney general, proposed that the minister is removed from "crude commercial negotiations" and be left with approving what the authority has distilled.

"It's Government policy to remove politicians from business and the handling of money. That is why we have the PPDA," Katuntu said.

Several ministers, however, defended Muloni. "This is a strategic resource which the Government values so much. If a minister messes up, he or she will be arrested," Muloni's deputy, Peter Lokeris said.

Ministers Prof. Ephraim Kamuntu (Tourism) and Bright Rwamirama (Animal Industry) said a powerful minister is good for governance.

Oulanyah later proposed that a middle-ground was possible in phrasing the functions of the minister as "responsible for approving licenses and agreements" after the Oil Authority has done the nitty-gritty.

MPs also demanded to approve the board of directors and the budget of the proposed National Oil Company instead of being left to the authority and the minister. Wilfred Niwagaba, Lilly Adong and Theodore Sekikubo (all NRM) suggested that this was the only way to ensure "fairness and transparency".

As Muloni, was oscillating between the Attorney General and the technocrats, the speaker put the matter to vote.

MPs disagreed with Government on granting the minister powers to directly grant licenses in "exceptional circumstances".

Katuntu said this would vulgarise the business sense of the National Oil Company with politics. However, Prime Minister Amama Mbabazi said where no applications are received, it makes sense to hand-pick a renowned investor and persuade him to come.

On national interest, Mbabazi noted that applications could come from a non-friendly country and Government needs a way to maneuver in such a case. The decision on the provision was deferred.

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