PAU should disclose more information on national content 

At the recently convened Citizens Convention on Extractives, the keynote speaker and my former teacher, Dr Busingye Kabumba delivered a passionate keynote address in which he argued for re-construction of our constitutional order as the best, if not only means to ensuring that extractives can equitably benefit the people of Uganda.

Dr Kabumba further warned that the oil curse was imminent if issues of human rights and due process are not followed and in a way his views are representative of many that I have spoken and interacted with.

While the Petroleum Authority of Uganda (PAU) has tried to regulate and monitor the petroleum sector with a view of trying to create lasting value for the Ugandan society, the petroleum subsector continues to be shrouded in mystery much to the frustration of Ugandans who are eager to hear about the developments in the sector as we gear up for first oil in 2025.

One of the areas of opaqueness has been the issue of national content. National content is defined under Regulation 4 of the Petroleum (Refining, Conversion, Transmission and Midstream Storage) (National Content) Regulations of 2016 as the level of use of Ugandan local expertise, goods and services, Ugandan citizens, businesses and financing in midstream operations as well as the general value added in the Ugandan economy through the utilisation of Ugandan resources in providing goods and services to the petroleum industry in Uganda.

Part VIII of the Petroleum (Exploration, Development and Production) Act of 2013 deals with national content. Specifically, Section 126 of the same provides for the prioritisation of Ugandan labour in all phases of petroleum activities while taking into account gender, equity, persons with disabilities and host communities.

On the other hand, Regulation 5 of the National Content (Midstream) Regulations empowers the PAU to supervise, coordinate and monitor the development of national content in midstream operations while also receiving national content performance reports from licensees. Yet despite this power, the PAU has disclosed really little concerning national content.

The PAU has disclosed that by June 2023, 13,819 Ugandans were directly involved in the sector representing a total percentage of 94 per cent of the total number of people employed within the sector.

The greatest frustration has been met by those who seek to know the breakdown of those numbers. So, for instance, the PAU has been silent on how many Ugandans sit in management, how many account for the technical level and how many can be lumped up with others.

This information is critical since it paints a more complete picture of the state of national content. While the numbers are important, they often paint a glossy and often incomplete picture that fundamentally differs from the reality. Extractives ought to actually benefit the people and not to appear benefiting the people.

It is in this breakdown of numbers that we shall be able to have a conversation on the quality of national content beyond the numbers. It is well within the powers of the PAU to disclose a thorough breakdown of this information. After all, PAU is enjoined by Article 41 of the Constitution to disclose information requested for by Ugandans.

So far unfortunately, all the calls made for this information have been met with deaf ears and automated mail responses. There are benefits to transparent national content practices and dealings. Researchers like Michael Z Ngoasong have for instance argued that local content is only important in stimulating economic development of petroleum producing countries only if international oil companies develop business practices that are deliberate about national content.

These business practices can only be developed and strengthened only if the sector regulator discloses how the companies are faring alongside national content targets set. With this information, Ugandans can then demand for better from these companies. In the end, more Ugandans are gainfully and meaningfully employed.

If we are to see a world where the national resources benefit the people, then we must severely fight opaqueness within the sector. There is a plethora of laws on access to information and indeed the country’s commitments to transparency forums like the Extractive Industries Transparency Initiative (EITI) which surely empower regulators like the PAU to avail this information.

If the opaqueness within the sector is not dealt with, then I fear that the ominous words of Dr Kabumba will forever hold sway over the sector for a long time to come.

The author is a lawyer