Uganda's oil scandal

Non-Ugandans may not realize that our country makes a lot of money from oil. The recent discovery of a massive new oil field in the Albertine region of the country is raising the stakes. All citizens are supposed to benefit from the sale of these resources, but this is not always the case.

Ugandans are growing more dissatisfied with the way oil deals are being carried out. Many people in civil society organizations and the media are decrying the absence of a proper oil policy, particularly the lack of transparency about oil-related transactions and how the resulting money is put to use.

Nobody foresaw that the discovery of oil in Uganda might be monopolized by President Museveni's right-hand men. But that's what has happened. (The photo above shows the president entering Parliament a few days ago with Speaker Rebecca Kadaga.) A number of senior government officials, right up to the prime minister, have been accused of pocketing millions of dollars in bribes from the oil companies.

Ugandans are not happy with the situation. The most frequent sentiment I've been hearing from people in Kampala boils down to this: "We have plenty of oil, but fuel prices are still going up. Why?" Some say that the President's reluctance to pursue corrupt individuals in the oil sector shows that he is using the oil sector to reward his followers.

When the first oil discoveries were made in 2006, Ugandans had high hopes. Oil wealth, they assumed, could help to revive the nation's economy. But it hasn't worked out that way. You could argue that the flow of black gold has actually made things worse by aggravating conflicts of interest and political instability. I would attribute this to the inadequate institutions and poor resource governance that characterize Uganda. There are many reports that the discovery of oil has actually led to people losing access to the resources on which they depend on for their livelihoods and food security.

Recently, one of my journalist friends visited Hoima, an area where Tullow Oil Company is carrying out oil exploration. What he found there can be described as the complete absence of corporate social responsibility on the part of Tullow. He concluded that the locals, and in particular those whose existence depends on local lakes and rivers, have suffered a lot. He documented how many people have been driven off their land. Some have received compensation, others have not.

Most of the affected individuals live in villages. They are poor, but rather than benefiting from the discovery of oil near their homes, their livelihoods are ruined. Where others see business opportunities, these villagers end up as the losers.

In Kampala as well as in northern Uganda, many Ugandans are skeptical whether they will ever see any benefit from the oil resources. Civil society groups have condemned the manner in which transactions are being carried out. They argue, among other things, that the deals often result in environmental problems whose costs are not paid by those who cause them. A BBC report quotes a Tullow manager's response: "In our view, not only the legislation, but our practice as a company ensures that there are no issues with respect to environmental management."

There are many aspects of the oil industry that have been left unexplained. Laws regulating the industry are weak and poorly enforced; the details of deals in the sector are often kept secret; the government and the oil companies have failed to disclose signed Production Sharing Agreement (PSAs); and, perhaps most worrisome of all, there are many allegations of oil companies bribing ministers and other government officials.

During the heated parliamentary debate in October 2011, documents were revealed alleging that Tullow Oil bribed Prime Minister Amama Mbabazi, Foreign Minister Sam Kutesa, and former Energy Minister Hilary Onek. Onek, who was accused of receiving about 17m Euros ($23m; £15m), strongly denied the allegation.

Meanwhile there are cases of oil companies continuing to operate on expired licenses. There are also cases where licenses have been issued without competitive bidding.

On October 11, 2011 the Parliament of Uganda passed a number of resolutions designed to clean up the sector. The parliamentarians demanded a stop to all deals until new laws can be passed, a review of existing contracts, removal of all ministers suspected of receiving bribes from oil companies pending full investigation, and so on.

Yet the government ignored Parliament's resolutions and moved ahead with signing new Production Sharing Agreements with Tullow Oil, failed to introduce new oil bills, and has allowed the implicated ministers to stay in office and to preside over the signing of new oil contracts. Many Ugandans understandably remain puzzled about who is really profiting from our oil resources.



DemLab Weekly Brief: One Step Back in Burma -- And a Hint of Promise in Pakistan


On Friday, the Burmese monk Shin Gambira, one of the leaders of the 2007 protests, was reportedly detained by the authorities. Earlier this week, opposition leader Aung San Suu Kyi received formal approval from the election commission to run in the parliamentary elections in April and a UN envoy said Burma was considering allowing foreign election observers in to monitor the polls. The US waived one of its sanctions against the country, making it easier for Burma to get help from international financial institutions, and reports indicated CIA director David Petraeus may travel to Burma later this year. According to a report ranking countries on their respect for the rule of law, Burma ranked last out of 197 countries, offering the least legal protection for foreign companies and investors.

Thailand's ruling party submitted a plan to the Parliament to amend the country's constitution, which was drafted after the 2006 coup. A similar attempt four years ago led to large protests.

Pakistan's Inter-Services Intelligence Directorate (ISI), the country's notoriously powerful spy agency, faced a rare wave of court actions against it. Although most of the cases have little chance of success, some analysts believe they demonstrate new resolve on the part of the judiciary to curb the power of the security establishment.

Two Tibetan brothers are said to have been shot down by Chinese security forces. They had been on the run since participating in January protests against Chinese rule. This comes after another Tibetan protester was reported to have set himself on fire in China's Sichuan province. A Chinese human rights group said that a dissident writer had been sentenced to seven years in jail for inciting subversion in a poem he wrote. Three other dissident writers have been sentenced to jail in the past few months.

The Maldives President resigned - under duress, according to him - after three weeks of protests and a police mutiny. Since then there have been violent clashes, and the Maldives' Criminal Court issued an arrest warrant against the former president and the former defence minister. The UN arrived Friday to meet with both parties.

(As FP's Joshua Keating noted in his report on the turmoil, the incident reminds us coups have become an increasingly rare phenomenon in recent years.)


Spain's notorious international human rights judge Baltazar Garzon, most famous for indicting former Chilean dictator Augusto Pinochet in 1998, was convicted for overstepping his jurisdiction and barred from the bench for 11 years. (The photo above shows a pro-Garzon demonstration in Madrid.)

The European Commission released a report saying Bulgaria and Romania needed to do more to fight corruption and reform the judiciary - meaning it is unlikely that either country will accede to the Schengen Area any time soon

Russian police threatened to retry a dead lawyer who had died in custody. Meanwhile, commentators continued debating the future impact of the protests in Russia.


Colonel Moussa Tiegboro Camara, minister in the Guinean presidency, was charged for his role in the 2009 Conakry stadium massacre of 157 protesters. Rights groups hailed the move as a step toward justice.

Commentators argued that, despite recent military gains, it is time for Somalia's government to start negotiations with the militant group al-Shabab. In a possible response to that increasing military pressure, al-Shabab announced that it was officially joining the al-Qaeda franchise. Meanwhile, the breakaway territory of Somaliland planned to lobby for international recognition at a conference in London on February 23. It has been battling its own secessionists since January.

Middle East & North Africa

In Syria on Friday, the regime intensified its bloody crackdown and two bombs struck military and security buildings in Aleppo. (The government and opposition blamed each other for the attacks.) A UN Security Council resolution on Syria was vetoed by Russia and China. The shelling did not stop despite Assad's pledge to embrace reform following a meeting with Russian Foreign Minister Sergei Lavrov. Commentators spent the week arguing about what the international community should do next, and there was talk of creating a "friends of Syria" group as well as sending a beefed-up joint UN and Arab League observer mission back on the ground. Syria's opposition was still struggling to overcome its own rivalries and divisions.

On Wednesday, Libya finalized an electoral law governing national assembly elections in late June. This elected body is to draft a new constitution and form a government until general elections are held next year. Earlier that week, court proceedings against 41 Libyans accused of being Gadhafi loyalists were postponed after the defense argued that they should be tried in a civil court - not a military court. The Libyan government predicted its budget deficit would reach $10 billion this year, explaining that it had only received a small portion of its frozen assets.

Egypt's Supreme Council of Armed Forces (SCAF) reiterated that it would relinquish power after the presidential elections in May, which were moved up from June earlier this week, although a Muslim Brotherhood spokesman demanded that the SCAF immediately hand over power to a coalition formed by the parliament. The Muslim Brotherhood also condemned calls by 40 political movements and parties for a day of civil disobedience and a general strike on 11 February. The question of how and when Egypt's new constitution should be drafted remained a divisive issue. US Supreme Court Justice Ruth Bader Ginsburg suggested the Egyptians look to South Africa's constitution as a model.

Yemen started a campaign to get people to vote in the upcoming presidential election. With only one candidate to vote for, officials are worried about low voter turnout. President Ali Abdullah Saleh, for his part, has vowed to return from New York to vote. (A reminder: He traveled to the U.S. for medical treatment after a parliamentary deal that gave him immunity from prosecution.)

Both the government and the opposition in Bahrain are preparing for the February 14 anniversary of last year's protests. Foreign journalists planning to cover the anniversary were denied visas.

In Iraq, Ministers of the Sunni-backed Iraqiya block ended their boycott of the cabinet, in a move to diffuse the political crisis which started last December.

In yet another sign of power struggles at the top, Iranian lawmakers summoned President Mahmoud Ahmadinejad to testify before Parliament in the next few weeks to answer questions about the country's faltering economy.

A recent survey indicated that three out of five survey respondents in the Middle East saw Turkey as a model for their country.

And finally, this week's recommended reads:

An inside report from Syria on the continuing rebellion.

And a Harvard professor with a background in Russia ponders the lessons of transition.

-- by Chloé de Préneuf