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How best Uganda can avoid the oil curse

Oil curse refers to a series of evils and contradictions which have tended to accompany any oil extraction and oil production venture, especially the less developed countries.

These include mainly impoverishment and marginalisation of the local population in the production areas, the prevalence of high unemployment and crime rates, widespread and total environmental devastation and desertification features.

The emergency of political tension and conflicts about the sharing of oil revenues, the worsening of income inequality and social injustice and a whole spectrum of features of accelerated social decay and social disintegration including broken homes, teenage pregnancy, school dropout, high crime rates, juvenile delinquency, street kids and staged gangs, high abortion rates and prostitution, narcotic drugs and alcohol abuse, slums and people who sleep raft on streets and enhanced public theft, embezzlement of public funds and lack of openness, transparency and public accountability.

As part of the oil curse, there is usually a marked increase in governance evils such as massive and gross abuse of human rights, autocratic, undemocratic and unconstitutional practices by the government in power, extra-judicial killings and political assassinations by security agents, and the shameful connivance between oil industry investors and the sitting government to maintain a state of political hegemony-political oligarchy in which the government in power remains in place permanently and undemocratically.

Additionally, oil production operations may lead to external tensions and war, as was witnessed in the Sudanese Darfur region where Chad officially waged war on the government of Omar al-Bashir (now deposed and awaiting trial at ICC in Hague-Netherlands for war crimes) in sympathy for rebels who took up arms in Sudan to challenge the unequal sharing of the revenues from oil.

There are also fears about the wasting and plundering of the oil resource by investors using inequitable and defective production sharing agreements (PSAs) and Memorandum of Understandings (MOU) in which, due to lack of negotiations and bargaining striking skills on behalf of government officials and local lawyers. Clauses are inserted into oil contracts which end up making governments and ordinary tax-payer losing monumental sums of money in fines, compensation damages, court and arbitration cases, and unaccounted, unsupervised oil and profit repatriation.

The oil curse is consequently a very alarming prospect facing Uganda as it prepares for the commencement of oil production, currently time-tabled by the government and major shareholder-TotalEnergies plc to commence in 2025.

Then Speaker of Parliament who currently serves as the First Deputy Prime Minister of Uganda and Minister of East Africa Community Affairs, Rebecca Kadaga on August 29, 2014 at Sheraton Hotel, Kampala a Public Lecture entitled: “How to avoid the oil curse in Uganda” this was presumably in commemoration of the 5th anniversary of the mini-refinery public hearing which took place on August 29, 2009 at Hoima Riviera Hotel, convened by National Environmental Management Authority (NEMA) and chaired majestically by Makerere University Don. Prof. Grace Bantebya Kyomuhendo.

They argued then that measures to overcome the oil curse are, correspondingly, several, complex and elusive.

There must be strengthening of openness, transparency and public accountability mechanisms including effective supervision of government actions by parliament and the other watchdogs of public interest including Non-Governmental Organisations (NGOs), social interest groups such as lawyers, engineers and quantity surveyors and valuers.

There must be intensified and consolidated citizen participation not only in overall environmental management and conservation but also in the management of the oil resource, itself.

This is made possible through intense mass education programmes, purposive and well-focussed capacity building as well as the formation of private volunteer organisations-association of land owners, small-scale holders or industrialists, and others operating in many fields impacting the oil industry.

For instance, to encourage afforestation (intensive tree-planting activities) association of tree-planting operators can be formed at every sub-county and district levels especially those in the oil-rich Albertine Graben zone.

The “polluter-pays principle” is a valuable environmental safeguard being applied successfully in all resource depending economies including Malaysia, Indonesia, Singapore, Angola, Gabon, Ghana and Mauritius, among others, all of them new oil producers.

This involves the levying of high deterrent deposit and contingency funds on every potential heavy polluter who shows his head.

There must be an intensified application of social-development mechanisms geared to social stabilisation and harmonization, strengthening social cohesiveness and social integration.

There must be strong initiatives in youth empowerment, empowerment of women, social support to migrants and displaced persons, well designed resettlement schemes and emphasis on alternative livelihoods designed to foment self-reliance and self-help such as practices in agro-forestry, recycling, handcrafts, textiles, poultry, pig rearing, bee-keeping, honey production, brick-laying, pottery, carpentry, metal works, market gardening and light industry such as grain milling and paste production from sim-sim and groundnuts.

Today Uganda’s oil venture is characterised by a blanket of darkness and secrecy.

This is as a result of lack of effective application of information, education and communication strategies in tackling an imminent social evil.

There must be mass mobilisation and sensitization and oil management and environmental sustainability issues.

For instance some of the features witnessed in the Delta state region of Nigeria should be widely disseminated and publicised to avoid the same mistakes being replicated in Uganda.

There must be an intensified and proactive and sustained programmes for the raising of awareness and sensitivity towards oil related evils.

Oil companies themselves must pursue a humane and proactive investment policies.

They must strengthen their corporate social accountability departments and operations, not limiting themselves to awards of scholarships, construction of education and health facilities and upgrading of social infrastructures such as provision of piped water.

Today multi-national companies must participate proactively in the democratisation process and all initiatives directly and indirectly which contribute to social harmonisation and peace.

In his Historical Landmark Encyclical “Justitia Etpax” (justice and peace) Pope John Paul II pointed out that the pacification of communities and entire nations is not just the responsibility of the government, the United Nations or NGO world, private companies equally have a moral role to fulfil in any way appropriate to a given situation because without doing so, it would be like milking a cow without giving it sustenance, since they are the most to benefit from a state of harmony and peace prevailing in any natural resource base of a country.

For instance, they must avoid conniving actively with dictatorial tendencies elicited by the host government in favour of investors, such as the sale of a 22 square mile piece of land in Kikuube district which ecologists allege is part of Bugoma central forest reserve land for sugarcane cultivation.

The oil firms should advise the government. There must be adequate environmental safeguards and mechanisms such as air quality monitoring, early warning systems, environmental clean-up technology and facilities and proper disposal of industrial effluents, waste water, and toxic waste and ordinary garbage.

The ministry of trade and industry through its relevant inspectors and monitors can enforce regulations on carbon quotas necessitating installation of low-waste and no-waste industrial technology, environmental restoration is commonly a viable measure against surface soil erosion and destruction of biodiversity and natural habitats, environmental abatement-mitigation measures are very applicable to industrial processes.

For instance the treatment of industrial waste water before disposal or the conversion of industrial fumes into vapour via granulation or the capturing of fumes into tanks referred to as carbon sequestration for subsequent release under regulated conditions.

It is as a fact that environmental devastation and resulting desertification features is one of the most prominent and most painful features of the oil curse, to be combated meticulously.

It is said that oil is not just an industrial and physical fuel. It is also a political fuel because of its tendency to fuel political-social tensions and disasters.

In 1990s a movement named Movement for the Survival of Ogoni People (MOSOP) was actively campaigning against the merciless desertification of the entire Ogoni lands by oil spills, pollution, soil contamination and land degradation by the oil companies.

A Nigerian writer and MOSOP leader, Ken Saro -Wiwa was imprisoned and then executed by the then Nigerian dictator Sani Abacha in 1995.

Abacha himself also succumbed to a mysterious death less than months late.

This marks a terrible and gruesome feature of the oil curse. The rise of dictatorship and gross human rights abuses.

What is the solution to this? Let’s take an example.

In the year 2012 in the wake of the debating of the Oil Bill, all Members of Parliament (MPs) were opposed to the provision that gave the minister power to make irreversible executive decisions relating to licenses and management.

They advised the government to put these powers in the hands of the Uganda Petroleum Authority, the regulatory authority in this sector, provided in the Bill.

There was a disgraceful fracas and stampeding by the MPs on the floor of parliament in front of TV cameras as the cabinet tried to force them to pass the Bill as it was giving absolute power to the minister of energy.

This was a Thursday. The following Tuesday the President hosted the ruling National Resistance Movement (NRM) caucus at state house and commanded them that the Bill had to be passed as it was.

The following Tuesday parliament convened and this Bill, now the Oil Act, 2012 was unanimously passed.

On Thursday the President went to parliament to talk to the MPs about Oil. This address was boycotted by the entire opposition side so stands of the left half of parliament were empty. The President began speaking.

He told MPs that they must avoid poisonous rumour-mongering such as the claim that the then Prime Minister Patrick Amama Mbabazi and Engineer Hilary Onek, then minister of energy and minerals and Sam Kutesa, the then minister of foreign affairs had received sweeteners worth billions of shillings from oil firms.

To challenge them he asked rhetorically “do you really think Hon. Amama Mbabazi ate this bribe?”

Butaleja Woman MP Cerinah Nebanda who was sitting in the middle of the empty opposition rows instinctively shouted out: “Yes…yes…yes!” the President, because he was visibly hurt then said: “Ah, that is my daughter Nebanda, she is like that”

He then said that many MPs, when they go out for conferences outside Uganda, they are bribed and told to block government programmes.

Nebanda on a point of order asked the president: “Mr. President, when MPs are invited to state house for briefing we are given a facilitation allowance of sh1m. Does that also mean that we are being bribed?”

The President said that some MPs are coached by the opposition and they take drug and other substances in order to be conspicuous on the floor of parliament, MP Nebanda corrected the President: she said: “this country belongs to all of us….an MP’s duty is to speak out for people who have no voice. Nothing can make me accept putting the resources of this country into the hands of one man, merely because the President commanded us to do that?” The President was completely silenced. This was a Thursday.

On Friday, the following day December 9, 2012, MP Nebanda briefly had a conversation with then Bunyole County MP Emmanuel Dombo at around 10am and told him she was going to Munyonyo Resort Hotel to relax.

At 11am she was seen driving out of the gates of parliament in her car Toyota progress.

At 3pm she rang her mother stating that having drunk some mango juice and eaten some chips she had contracted a severe stomachache.

By 4pm the pain had increased. She rang her boyfriend to come and pick her up because she realized that she was dying and could not drive by herself.

They arrived at her boyfriend’s place in Muyenga slightly after 7pm and he tried to administer to her some pain-killers but the situation was getting worse so, she decided to take her to the neighbouring clinic.

By this time MP Nebanda had become unconscious. At the clinic they administered her a simple drip and told the boyfriend to take her to a bigger clinic since they were not equipped to handle such a serious case.

They arrived at a bigger clinic in Nsambya at around 8pm but they were told not to bother any more since MP Nebanda was already dead.

Many questions abound whether Nebanda was a victim of a political assassination via poison.

The Observer newspaper then reported that MPs believed that Nebanda was poisoned, as she was a vocal critic of the government. MPs who propagated that line were equally arrested including Muhamad Nsereko.

The Nebanda case is still a bone of contention up to today. This case graphically illustrates that features of the oil curse are already with us in Uganda: the fueling of political tensions and conflicts, and disagreements about control of the oil resource. It also graphically illustrates that in order for the oil curse to be avoided in Uganda, the governance issues must be streamlined.

Today’s government is described as being undemocratic having captured power by use of guns.

Rather than being focused on nation building and sound statecraft they keep asking the question “where were you when we were saving this country from dictatorship?”

They take the state and the mechanism of the state, and the entire resources of this country as their own personal property.

There is a state of political hegemony and oligarchy in which NRM is likely to be in power for some good years to come having been able to stone and cow into passivity all forces of opposition.

Presidential term and age limits were removed. There is invasion of the work of parliament, suppression of criticism, witch hunt of critics by imprisoning them.

To avoid the oil curse the governance issue must be streamlined. Exercise for rule of law, foresighted laws for oil governance and respect of the doctrine of separation of powers.

In a book “Why Nations Fail” the authors focuses on the historical currents and critical junctures that mold modern polities: the processes of institutional drift that produce political and economic institutions that can be either inclusive — focused on power-sharing, productivity, education, technological advances and the well-being of the nation as a whole; or extractive — bent on grabbing wealth and resources away from one part of society to benefit another.

To understand what extractive institutions look like, they consider les Grosses Legumes (the Big Vegetables), the sardonic Congolese nickname for the obscenely pampered clique around Mobutu Sese Seko, the strongman who ruled what is now the Democratic Republic of the Congo from 1965 to 1997.

When Mobutu decreed that he wanted a palace built for himself at his birthplace, the authors note, he made sure that the airport had a landing strip big enough to accommodate the Concordes he liked to rent from Air France.

Mobutu and the Big Vegetables were not interested in developing Congo. They were interested in strip-mining it, sucking out its vast mineral wealth for themselves. They were, at best, vampire capitalists.

But the roots of Congo’s nightmarish poverty and strife go back centuries. In the same book, Botswana today has “the highest per capita income in sub-Saharan Africa” — around the level of such success stories as Hungary and Costa Rica.

How did Botswana pull it off? “By quickly developing inclusive economic and political institutions after independence,” the authors write. Botswana holds regular elections, has never had a civil war and enforces property rights.

It benefited, the authors argue, from modest centralization of the state and a tradition of limiting the power of tribal chiefs that had survived colonial rule. When diamonds were discovered, a far-sighted law ensured that the newfound riches were shared for the national good, not elite gain.

At the critical juncture of independence, wise Botswanan leaders such as its first president, Seretse Khama, and his Botswana Democratic Party chose democracy over dictatorship and the public interest over private greed.

In other words: It’s the politics, stupid. Khama’s Botswana succeeded at building institutions that could produce prosperity. Mobutu’s Congo and Robert Mugabe’s Zimbabwe didn’t even try.

Many informed voices and enlightened minds have proposed that today the best solution to prevent the oil curse in Uganda is simple: “Keep the oil in the ground and be paid for keeping it there” like in Ecuador.

Ecuador did that in an effort to preserve Yasuni National Park an area of staggering biological diversity like Murchison Falls National and Lake Albert where TotalEnergies plc and Cnooc Uganda ltd are currently establishing production facilities despite opposition from a cross section of ecologists and climate change activists.

The Writer is a Journalist with The Albertine Journal

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