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Norwegian Oil Aid Supports Secrecy

Norway has granted millions in aid to the development of the Ugandan oil sector. Critics are arguing that the aid contributes to secrecy, corruption and inadequate legal regulations. They are urging the Norwegian government to pressure Uganda to ensure that the oil industry does not end up being a curse for the country.
Artikkelen er mer enn to år gammel. Ting kan ha endret seg.
Norway has granted millions in aid to the development of the Ugandan oil sector. Critics are arguing that the aid contributes to secrecy, corruption and inadequate legal regulations. They are urging the Norwegian government to pressure Uganda to ensure that the oil industry does not end up being a curse for the country.

Tullow denneTullow Oil is one of the companies that have secured access to Uganda’s oil resources. (Photo: Conservations Concept)

Norway has for several years been heavily involved in the Ugandan oil sector through the initiative Oil for Development (Olje for Utvikling) which is coordinated through Norad (The Norwegian Agency for Development Cooperation). Through this program, Norway has granted funds for building and developing the Ugandan oil sector and the completion of a national oil and gas policy for the country.

The purpose of the program is to contribute to ensuring that Uganda’s oil resources are used to the benefit of the people and that environmental and human concerns are addressed. However, the growing oil sector in Uganda is faced with a number of problems. The Ugandan government is criticized for denying access to deals struck between the government and the international drilling companies Heritage and Tullow. The British organization PLATFORM, argue the deals are beneficial only to the foreign oil companies and not the development of the Ugandan economy.

Several Ugandan and international organisations are concerned about the future of the oil industry and its effects in Uganda. They argue that since Norway is the main donor and development partner, it has responsibility for the ensuring due process and that it needs to play a far more active part than it has done so far.

– The risk is that if donors do not engage with the government effectively on the issue of petroleum management then the country will slip into the resource curse. Corruption and mismanagement will become entrenched and the country will becomes mired by social conflict, human rights violations and environmental abuses, says George Boden from the organisation Global Witness to Framtiden i våre hender.

–  Uganda needs the expertise they gain through Oil for Development in order to advance the oil sector. We want Norway to use its position in order to pressure the government to establish more transparency and accountability in the industry, says Dickens Kamugisha, head of the African Institute for Energy Governance (AFIEGO) in Uganda.

Weak legislation
Many critics argue that the proposed legislation, which Norway has played a key part in formulating, has several serious deficiencies. The law, currently in parliament, will among other things grant large powers to President Museveni, who has been Head of State since 1986:

– The proposed law contains huge loopholes which allow for a strong degree of centralized government control of the oil sector with no parliamentary oversight, a lack of transparency and consultation with effected communities, and inadequate social and environmental protection, says George Boden to Framtiden i våre hender.

Boden, who has followed the developments in Uganda since the country discovered its oil resources in 2008, argues that the laws lack transparency and there are weak consultation processes with local communities that will be impacted by the industry.
Boden is also concerned about what he describes as a militarisation of the oil industry:

– President Museveni’s son controls the security forces in the area where they are searching for oil, and the President’s brother is one of the owners of the private security company that is responsible for the security at some of the construction sites. That is a dangerous development, argues Boden.

Insufficient environmental regulations
The oil fields in Uganda are situated in one of the world’s prime nature reserves in the Great Albertine Rift. In 2008, then head of projects in Norad, Petter Nore, said that the Oil for Development had a stated aim to contribute to environmental consideration gaining a central place in the Ugandan oil sector.

However, the legislation currently being considered is insufficient in terms of environmental protections argues Boden from Global Witness.

“Several areas of the Bills refer to ‘best petroleum industry practice. However, the Bills do not refer to specific guidelines and principles in relation to best practice in the relevant areas” and “Fines levied on companies for violating environmental or social provisions in the Bill are insufficient to act as a successful deterrent” the organisation writes in their new report ‘Uganda’s petroleum legislation: Safeguarding the sector’.

MurchisonFallsThe oil drilling in Uganda is in close proximity to the national park Murchison Falls. Many fear that the discovery of oil will be detrimental to the rich plant and animal life here. (Photo:Anne Leifsdatter Grønlund)

Calls for more donor pressure
Norway as the biggest donor and development partner needs to use its influence to put greater pressure on Ugandan authorities, argues Boden:
– Norway needs to make it clear to the Ugandan government that they expect that their assistance will meet with international best practices. To only give advice when the Ugandan government seeks it is not enough, Boden says.

Dickens Kamugisha from the African Institute for Energy Governance agrees:

– We are doing what we can to influence the authorities and to make them listen to us, but we believe that Norway, as the major donor and development partner, has greater prospects of being successful, says Kamugisha.

With all the secrecy currently surrounding processes, Kamugisha and other Ugandans fear that the purpose for Norway’s oil aid is far removed from the stated aims:

– The way things are now we fear that Norway is not looking out for the Ugandan people, but rather that their intent is to build friendly relations with our government in the hope that this will result in Norwegian companies gaining favourable contracts in Uganda, he states.

Will follow up
– This last point I can categorically deny, says Petter Stigset, section head in Oil for Development in Norad. We are often accused of catering to Norwegian oil companies, but our intent is to help and ensure that these countries reap the benefits of their natural resources. Since these resources belong to the people, they need to be administered in a way that serves future generations.

– Then don’t you think is calls for concern when several Ugandan organisations feel that this aim of Oil for Development is not met?

– You could say that. But we have been in Uganda since 2006 and you cannot change the development of a country in such a short span of time. However, of course we take note of these concerns. We will see if we cannot try to answer to them, Stigset says to Framtiden i våre hender and adds:

– Our purpose is nevertheless clear – it is to contribute as much as we can to the country.

– This may all seem a bit backwards. Norway could clearly put more pressure on the Ugandan government. But instead, you are transferring expertise and know-how without conditions. On the other hand, Norway supports civil society organisations that try to pressure the government but are failing at it?

– You’ve got a point there. But I wouldn’t say that our support is unconditional. There is much talk about the proposed oil legislation in Uganda not being forceful enough. We need to talk about this internally concerning how the law will affect civil societies if it is passed, says Stigset.