Legal and policy gaps

Legal recourse for transparency in contracts

Author

The Open Society Initiative for Southern Africa (OSISA)

March 16th, 2016
Legal recourse for transparency in contracts
Country reports indicate that transparency in contracts is still a thorny issue. For example, While Tanzania has been declared EITI- compliant, its constitution and other relevant laws are not explicit on the legal requirements for transparency in contracts (such as the need to table them before the parliament), as well as legal recourse in the event of transparency being curtailed. On their part, Uganda and Kenya are not EITI-compliant, denying their citizens the ability to invoke international standards and best practices in the management of extractive industries. However, Kenya has a progressive constitution whose Article 71 requires parliamentary ratification of transactions that involve the grant of concessions or rights to extract the country’s natural resources.
 
Different levels of implementation of the laws and policies
Explicit in the country reports is that the three country’s under review are at different levels in their implementation of laws and policies relevant for the promotion and protection of social and environmental accountability. This inhibits regional exchange of experiences.
 
Kenya has formulated the Petroleum Exploration, Development and Production Bill of 2014. When passed into law, the Bill will repeal the Petroleum (Exploration and Production) Act of 1986. On its part, Tanzania has adopted the 2013 National Natural Gas Policy of Tanzania, but it is yet to formulate a new law on oil and gas despite recent discovery of oil, and in spite of demands from stakeholders that the Petroleum
(Exploration and Production) Act, of 1980 needs to be replaced with a new one to be in line with social and technological development. Similarly, Uganda is implementing the National Oil and Gas Policy (NOGP) of 2008, which spells out principles for the management, and development of oil and gas and the protection of the environment
 
Access to information
Country reports indicate that, while all three countries have laws on the right to access environmental information, the public has no recourse mechanisms specifically tailored to challenge the denial of information. The Tanzanian describes this right as “one-sided,” meaning that while citizens are entitled to enjoy it, governments have no corresponding duty to furnish the required information.
 
Freedom of association is restricted in Uganda
While the right to freedom of association, especially the ability to form civil society non-governmental organisations is pivotal in enhancing oversight functions and boosting accountability in the extractive sector, Uganda’s report is explicit that such a right is restricted in that country.
 
Lack of a law on local content
In the extractive sectors, local content policies are of significant importance to oil-and gas- producing countries. This is because, the policies are meant to extend benefits accruing from the oil and gas sectors into other economic sectors. However, reports indicate that the three East African countries under review have not enacted comprehensive laws to enforce local content policies and strategies. In Uganda, the Petroleum (Exploration, Development, Production and Value Addition) Act 2010 provides that investors should give priority to local suppliers and employees when seeking for contractors and personnel. This resonates with Kenya’s Section 9(1)(h) of the Petroleum Act, which provides for preference in the use of locally available products during the signing of production sharing agreements (PSAs). Tanzania has formulated a draft local content policy, but it is yet to enter into force.
 
The laws give a lot of power to the executive
A common theme in all three countries reviewed is the fact that the executive is responsible for signing concession agreements binding on their respective countries. While this in itself is not a problem, such enormous power is exercised within a context of lack of transparency in the running of the sectors. For example, Kenya and Uganda are not EITI-compliant, while Tanzania has no explicit requirements for parliamentary ratification of contracts entered into by the executive on behalf of (and binding on) the government.
 
Some laws are not preceded by policies
As a general rule, executive arms of governments formulate policies that contain government plans, visions and objectives to be implemented in a given sector. Laws are then enacted to implement these policies (the legal force). It is clear in reports of countries reviewed, however, that this sequence is not followed, resulting in the enactment of laws without having in place adequate blueprint policy objectives to be implemented.
 

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