sharing in governance of extractive industries

Bwesigye Don Binyina
  • Male
  • Perth, Western Australia
  • Australia
  • yes
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Lack of a legalframework for Oil & Gas undermining the Industry.

Started this discussion. Last reply by Kasita Ibrahim Emolu Oct 6, 2011. 4 Replies

June 24, 2011Secrecy, lack of regulation undermining oil industryBottom of Form Posted  Friday, April 8 2011 at 00:00The…Continue


Welcome, Bwesigye Don Binyina!

Profile Information

Organisation (if non, specify N/A)
Africa Centre for Energy & Mineral Policy (ACEMP)
Type of Organisation
Civil Society Organisation, Academia
Job Title
Executive Director
About My Work
My Work involves building the capacities of Local Communities in the Minerals, Oil & Energy to proactively participate in the governance of the Oil industry, demand their rights from the duty bearers. I also work with the policy makers both at the Central and Local government level, the legislature and Judiciary to ensure that duty bearers play their respective roles policy, legal formulation, access to justice by the communities within resource communties. Providing Pro Bono Services to indigent communties among others.
Areas of interest
gold, diamonds, oil and natural gas, csr, governance and anti-corruption, investing, environment, social accountability, human rights, contract and licensing, monitoring revenue collection, redistribution and sustainable development
Intererested in job/consulting opportunities

June 24, 2011

Secrecy, lack of regulation undermining oil industryBottom of Form
Posted  Friday, April 8 2011 at 00:00

The developments in Uganda’s oil industry are turning out to be a classic parody of an oil kleptocracy in the country. The government has continuously fed the public with a deceptive lustrous emerging industry, yet it continues to engage international oil companies in questionable transactions.

It all started in 2004 when Tullow Oil acquired South Africa-based Energy Africa’s interests in Uganda at a paltry $570 million. It also acquired Australian-based Hardman Resources interests in Uganda at $1.1 billion in September 2006. Both transactions were not taxed by the government of Uganda, yet the Income Tax Act provided for a Capital Gain tax.

In 2010, the Government of Uganda got itself entangled in an avoidable tax dispute between Heritage and Tullow worth $404 million originating from 1.45 billion acquisitions of 50 per cent interests of Heritage in the oil wells in the Albertine Graben, giving Tullow Oil 100 per cent stake. All the above could have been avoided had government heeded expert advice to suspend all oil transactions and first lay a harmonious policy and legal framework that would institutionalise the sector. Amidst this confusion, the President instructed that no oil deal was to be concluded without his consent.

In March 2011, a beaming Minster of Energy and Mineral Development appeared on state television flanked by the head of Uganda Revenue Authority and proudly but falsely declared that the standing dispute between Tullow Oil and the Government of Uganda had been resolved with Tullow agreeing to pay all the outstanding debts owed. More drama unfolded at a press conference in Kampala held by Tullow Oil on March 31 when it, in essence, admitted to have been compelled by the Government of Uganda to deposit $313.4 million in 10 days if the government was to endorse its planned farm-down of 1/3 of its interests to CNNOC and Total at a cost of $2.93 billion accruing a capital gain tax of $472.7 which, according to London (Dow Jones –Newswire), the Chief Executive Officer of Tullow, Aidan Heavey, admits is money owed to the Government of Uganda, yet his operations manager in Uganda disputes and now seeks the intervention of the Tax Appeals Tribunal.

In essence, the Government of Uganda abandoned an unresolved tax dispute just to deliberately enter into another. The reason advanced by Tullow Oil for disputing the current tax dispute is lack of adequate petroleum laws. While the government was quick to pass the Cultural Leaders Bill into Law before the elections to subdue cultural leaders, the Petroleum (Exploration, Development, Production and value Addition) and Revenue Management laws have been shelved to enable government continue secret deals that have not been sanctioned by Parliament.

One is left wondering the wisdom, expertise and or intentions of government representatives in the conclusion of these dubious transactions. Why is the government defying all expert advice and is in such a hurry to continue sealing deals in an unregulated industry? Where is the accountability for the $121 million paid by Heritage and the $141.8 million recently paid by Tullow?

Could this be evidence that the oil cancer is already eating up our own political fabric?

Mr Bwesigye is A Minerals, Oil & Energy Justice Advocate

Comment Wall (4 comments)

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At 16:04 on September 27, 2011, Dana Wilkins said…

As luck would have it, i'm scheduled to be in Nairobi on exactly those days, we will have to arrange something!

I've just added you on skype, we can sort something out from there.

At 13:26 on September 27, 2011, Dana Wilkins said…

Hi Bwesigye, Thank you so much for getting in touch! I was really interested in learning more about your work in Uganda and your experiences with the development of the legislation there, so tea would be perfect. Unfortunately i see you are based in Kampala and i am unlikely to travel through any time soon; is there any chance you'll be heading to Nairobi, Juba, or London in the next few months? Alternatively, i'd love the chance to introduce myself and our work via skype or telephone at least. Let me know what works best for you and we can sort something out. I look forward to speaking with you.

At 17:25 on July 27, 2011, Kobina Aidoo said…
Bwesigye - Why don't you post your upcoming event under the events tab for all to see?
At 10:31 on July 27, 2011, Elison Karuhanga said…
Thank you for your kind and generous message. It is certainly great to see you shining a light on the road to the future and I most def will join. The months of August and Sept are a bit tight for me though. Thanks brother.


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