{UAH} INCORPORATING THE KINGDOMS IDEAS AND THE PUBLIC FINANCE BILL?

INCORPORATING THE KINDOMS IDEAS AND THE PUBLIC FINANCE BILL?
HOW READY ARE WE? OR ARE THE 80 MPS TO CREATE A PUBLIC SHOW?

The idea of 80 MPs coming over to Bunyoro to consult the King or the Kingdom on how to manage the revenue sharing and the management of the industry affecting Bunyoro is welcome. But to determine what shares Bunyoro as a host to petroleum industry may not be as simple as it may sound. This is because the dynamics of the industry and its politics are complex and need first to consider:
i. Determining shares will require detailed information with disaggregated figures that will allow stakeholders of Bunyoro to match benefits streams with company payments to them and government;
ii. The assessment and checking taxes being computed;
iii. COSTS OF OIL AND GAS PRODUCTION:
The current government process seems to be silent on the issue of the costs incurred by companies in the oil industry, yet these companies have capacity to use very complex accounting system well known that is used to cheat in the measurements of oil. They have better accounting systems than most developing countries. Detailed cost parameters, as described within Uganda’s 1999 Model Contract, should be included within the law. The law should stipulate that companies be subject to their independent audits of their costs. In this way stakeholders, who access the figures on costs should be able to know what revenue they deserve. Has this been taken care of?
iv. PETROLEUM MEASURABILITY AND LIABILITY:
Petroleum laws require licences to measure the petroleum extracted. But companies have been known to cheat in these measurements. How are MPs going to ensure in the law that the revenue generated and percentage of which will go to Bunyoro is the right when they themselves and stakeholders of Bunyoro have no access to contracts and licenses signed?
v. There is poor information access across the oil sector for the stakeholders in Bunyoro which will make it difficult for either the King or others to make any meaningful contributions
vi. We need to learn from Ghana, especially how MPs and mineral industry host communities have been deliberately trained to enable a honest legislation and policy framework, production started but legislation had to wait until people have been trained.

However ,Uganda being an African country, like the other cases of African countries, it has been pointed out that legislatures often find the extractive Industry’s technical complexity beyond their comprehension and therefore lag behind domestic Civic groups and international advocacy organisations in their efforts to promote transparency and accountability in the extractive industries (Bryan and Hofman, 2007). Capacity building efforts should therefore also target the strengthening of legislators to improve extractive industry management and oversight.

• The MPS the Stakeholders establish ways of creating a local synergy between the Kingdom, civil Society to productively engage in the oil industry regulation and advocacy. The emphasis here should be that Bunyoro is not being selfish but the discovery of oil beneath the land, near our urban centres or cultural points of interests, the local community and cultural institutions will affect them and will require adequate response. The Hon. MPs need to agree on creating and administrative procedure or institutional framework for the region and stakeholders affected to obtain accurate information and respond constructively. That way, all interested parties can work together to reach a positive solution, rather than have and oil company inadvertently (or carelessly) damage aspects of Uganda’s culture and society (Civil Society Coalition for Oil and gas in Uganda, CSCO Research Paper No.1, 2010).

• There should be a mechanism created in place for the proper allocation of revenue to local governments of Bunyoro. Local governments in the areas surrounding the oil and gas fields will be disproportionately burdened by oil production. As you may have already witnessed, new equipment and workers flooding into the region, is making these local governments struggle with addressing strains on infrastructure, land and inflation on certain goods.
• The local governments will need enough resources to meet new challenges; a regional government will need the 15 percent share of oil royalties as was initially provide for in Schedule 4 of the Draft Petroleum (Exploration, Development, Production and Value Addition) Bill, 2010. And the final agreement and the finance and revenue Act should include a stronger emphasis about how this revenue is to be allocated, with much clarity.

• The outcome of the discussion needs to point out specific percentage to be allocated to the; Kingdom, local and regional governments; splitting percentages between the stakeholders on a sustainable basis.
The stakeholders especially the subnational governments should receive royalties in recognition of their increasing costs of administration and development. These The MPs should put a law that stipulates that parliament will review and increase this percentage as need arises.

Lastly the law should be able to specify that; the kingdom, local and regional governments will receive royalty allocation with no strings attached. Theses specified stakeholders should be able to recognise or identify their specific projects within their jurisdiction, determines the costs without central government interference. The region needs to have that freedom to spend the revenue in what they consider to be the most priority areas they fell fit.

HOW OUR LEGISLATORS SHOULD OR COULD HELP US IN UNDERSTANDING THE BILLS AND LAWS:
• Two major petroleum Acts have been passed, the one on Production and the other on refining and value addition. Have the MPs helped the Kingdom and public to get acquainted with the provisions affected the regions in relation to the rest of the country? This knowledge will be important in influences the finance and revenue management Bill.

• Getting involved in promoting transparency by using external expertise and leadership on extractive industry (Oil and gas) transparency and good governance. In Feb.2008 the Oil and Gas policy was passed. To ensure that international transparency standards are followed the policy recommended that Uganda joins the Extractive Industry transparency initiative (EITI). This would establish a structured process for many different actors-government, institutions, the kingdom, civil Society, and private sector-to build partnerships. By engaging on EITI, the communities, CSOs, the Kingdom and local governments would gain knowledge and expertise on the oil and gas industry issues, and could come to be seen as credible leaders in this important industry now affecting the citizens, and the people of Bunyoro in particular. Since October 2008, when the Parliament passed the resolution to join the EITI nothing has been done, but contracts, agreements and licenses have been signed. How can this process be trusted as genuine?

• The EITI process would help, if well monitored and managed to publish important information on revenues and contracts signed. Through well organised and coordinated committee work, legislatures could activate their oversight authority. They would conduct public hearings and consultations, raise useful information from public, promote public awareness and the oil industry and importance of transparency and incorporate public input into the process. So, even without the EITI, has your area MP performed such a role?

• The coordination of efforts with society organisations by MPs is very important. Some CSOs in Uganda are very active and informed or even very technical in the extractive industry. They have links with international organisations that provide them with financial support and information about the oil and gas industry, and transparency initiatives. These can provide legislators with useful information which they can in turn share with their constituents, help to advocate for in encouraging government to adopt or improve on governance, provide led to and informed ideas for developing a policy to sustainable development of Bunyoro as an oil producing area, or help to hold local governments and the central government accountable for missing or mismanaging revenues.
Have such initiatives been done so far?

• Having a constituency communication: Have they? The country’s citizens of Bunyoro are deeply concerned as to whether the oil and gas industry in there are will benefit them, but they know very little about what government receives from this industry and companies there, or how the revenue is spent. Legislators out to transmit this information through their regular contact with constituents or voters; how often has this happened?

• Building and leveraging relationship with other transparency initiatives like EITI.
Legislators and local stakeholders in Bunyoro region can become better informed, and more effective overseers and participants of the transparency initiatives processes working with groups such as Revenue Watch Initiative, EITI, Publish What You Pay, transparency International and Global Witness and donor organisations and other international interest to help the communities learn how to engage meaningfully in the oil and gas industry. What attempts have been made so far in this direction?

CHALLENGES OF THE KINGDOM, LOCAL GOVERNMENTS AND COMMUNITIES INVOLVED:
So when the 80 MPs finally come what are you going to discuss as a community to determine you demands in the:
ABSENCE OF TRANSPARENCY INITIATIVES:
• Is the Kingdom well guided and in the know about the technicalities involved in determining revenue management and what it takes to negotiate contracts and money to be paid or the standard provision of the fiscal regime in the oil industry?
• In the absence of local expertise has Bunyoro Kingdom created synergies and increased collaboration between experts, SCOs or NGOs, LGs and other community leaders to be able to address issues like;
• Payments of shares or revenue to Bunyoro which will require the knowledge of the basis for cooperate social payments made which they do not know;
• A strict rules applying to the definition of ‘material payments’ and ‘discrepancies’ in the industry;
• Information on how concessions were awarded or should be awarded to companies who got contracts in order to negotiate the money they should be paid;
• World over it has been established that being open is the cornerstone of the effective management of revenue in the oil industry. Hence if the industry is going to benefit Bunyoro region, to be able to respond to oil industry activities, different government offices and public must have access to information about what is happening in the sector.
• Despite the importance of transparency, government has not fully engaged the stakeholders of Bunyoro. By default all the information has been kept confidential. The Ministry of energy has remained determinedly non-transparent about what goes on in the sector management. It has not released information about oil company practices or shared Production Agreements to the Parliament or stakeholders of Bunyoro.

On are Bunyoro communities going to base their demands for shares and on what justifications?
Lastly, several adhoc committees have been set up to carry out inspections for compliance with the existing petroleum legislation and license conditions, has Bunyoro generated enough information to help in the process.
Have the local institutions been involved in these license inspections? These committees if formalised into law; to they involve stakeholders from the directly affected Bunyoro? Do they include our MPs, the Kingdom representative, local governments and civil society organisation?
When they do the inspections do they make all the reports or findings public?

THANK YOU VERY MUCH FOR READING.''

Steven Birija Kazimura

--
"My best songs: http://soundcloud.com/kibirige64/arise-final-mix,  http://soundcloud.com/kibirige64/revolution-final-mix,  http://soundcloud.com/kibirige64/president-final-mix