Is there a contractual obstacle preventing TPDC from providing gas contracts to parliament?

From The Citizen, 7/11/14

From The Citizen, 7/11/14

Prof Sospeter Muhongo, Tanzania’s Minister of Energy and Minerals, speaking in parliament last week, said that there was no way his ministry would submit gas contracts to the Public Accounts Committee (PAC) of parliament. This is despite the PAC having repeatedly requested the Tanzanian Petroleum Development Corporation (TPDC) to provide copies of the 26 Production Sharing Agreements (PSAs) the government has signed with oil and gas exploration companies. And despite the arrest (briefly) of the TPDC Chair and acting Executive Director for refusing to comply, on the orders of the PAC chair, Zitto Kabwe.

Here’s what Prof Muhongo said:

“We have to adhere to government regulations. We cannot subject the contracts to public discussions, because they are regulations in place governing them. Even contracts between individuals, like yourself and somebody else must be governed by certain rules.”

There are no terms relating to confidentiality or transparency in the Statoil PSA Addendum that was leaked a few months ago. But this is inconclusive, as the leak only revealed the Addendum to the original PSA, not the full document.

But the launch, last week by OpenOil, of a repository of publicly available oil and gas contracts by OpenOil, provides another opportunity to see whether these contracts typically include confidentiality / transparency clauses. The repository includes one PSA for Tanzania, signed in 2001 between TPDC and PanAfrican Energy Tanzania Ltd, who run the Songo Songo gas field. This has been available since 2006 as part of the public filings of PanAfrica’s Canadian parent company, Orca Exploration Group, with Canadian regulators.

The contract was downloaded over 5,000 times in the first 24 hours after bring posted by OpenOil, so there is clearly public demand to see it. And just three days later, PanAfrican Energy Tanzania posted the PSA on their own website. Presumably they recognised that there’s no point trying to keep it hidden any longer, and possibly they were also embarrassed that something people could easily access elsewhere was not available on their own site.

So does the PanAfrican contract have any confidentiality or transparency terms? Yes it does:

from PanAfrican Energy Tanzania's PSA - clause 14.3, page 44

from PanAfrican Energy Tanzania’s PSA – clause 14.3, page 44

“PanAfrican Tanzania or TPDC, as the case may be, may disclose such information as is required by law or appropriate regulatory authorities, or to prospective lenders or shareholders”

In other words, if the law says the contract should be disclosed, or if a regulatory body (such as PAC) requires it, then the contract says that this is permitted.

I also had a look at two of the model PSAs – the 2008 and 2013 versions published by TPDC. The same terms are in both:

MPSA 2008 confidentiality terms

2008 PSA, Article 16 (e) (page 40)

MPSA 2013 confidentiality terms

2008 PSA, Article 18 (n) (page 54)

In both the model PSAs, the terms are exactly the same:

data, information and interpretations may be disclosed by Contractor to:

(ii) comply with statutory obligation or the requirements of any governmental agency or the rules of a stock exchange on which a Party’s stock is publicly traded in which case the disclosing Party will notify the other Parties of any information so disclosed prior to such disclosure

So again, if the law or any government agency says a contract should be disclosed, there is no contractual reason why this should not happen.

It’s in both these model PSAs and in the only actual PSA we can see in its entirety (PanAfrican), so it seems likely that it’s in all the signed PSAs. On this evidence, there is probably nothing in any of them that prevents TPDC from providing them to parliament.

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Further reading:

“Unless the government practises good governance, which revolves around transparency, it might as well kiss goodbye the idea of commanding popular support. What is it exactly that is stipulated in those PSAs that it has to be kept secret even from the people’s representatives?”

And take a look at the front page of HabariLeo newspaper this morning:

HabariLeo 191114

Remember that this is a government-owned newspaper. The headline: “Oil and gas contracts are now required in parliament.” The article itself focusses on the Chair of the parliamentary committee on Economics, Trade and Industry, Luhaga Mpina, calling for contracts to be provided to parliament.

3 thoughts on “Is there a contractual obstacle preventing TPDC from providing gas contracts to parliament?

  1. Steve

    Interesting. And you would think such text would be standard boilerplate.

    The other thing that baffles me about this, is why sharing with a parliamentary committee should ever cause any problems? Surely they are part of GOT? I draw an analogy with the intelligence oversight committees that both the British parliament and the US congress have. These guys have access to top secret information, but it is provided to them in private. If the PSAs demand confidentiality wrt the general public that is one thing, but that should not prevent sharing with a small parliamentary committee.

    1. mtega Post author

      Thanks for your comment, Steve.

      I don’t think there’s any doubt that the PAC, if they get access to the contracts, will make them public. Their approach as a committee is almost always to be very open, for example with journalists invited to observe their meetings.

      1. Steve

        Sure. Such would be my expectation too. My point is that any well-functioning democracy should have rules in place for parliamentary committee oversight of otherwise confidential government documents. And although Tanzania’s democracy is still relatively young and still developing, I am surprised that they didn’t inherit any such procedures from us Brits.

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