Tanzania’s draft extractive industries laws say a lot about transparency. Highlights and initial thoughts

UPDATE 17/6/15: From the published parliamentary timetable, it appears that the government intends to pass these three bills under a certificate of urgency. The current parliamentary session has been extended until July 8, 2015, for this purpose. I have amended this post accordingly. I have also added some information relating to which of the bills are set to apply to Zanzibar, and which to Mainland Tanzania only.

Set to become a thing of the past? (Source: The Citizen, 7/11/14)

Set to become a thing of the past? (Source: The Citizen, 7/11/14)

A long-awaited series of bills governing the extractive industries sector in Tanzania has just been published: The Petroleum Bill, The Oil and Gas Revenue Management Bill, and The Tanzania Extractive Industries Transparency and Accountability Bill. All three are due to be presented to parliament shortly – just a few months before the elections.

I will leave it to others to examine the bills in detail – there is a lot here, over 200 pages in all. But what do these laws say about transparency in the sector? I have collated some highlights.

In the Petroleum Act (where “petroleum” includes both oil and natural gas):
(This bill applies to the whole of the United Republic, both Zanzibar and Mainland Tanzania).

First, the bill makes it a requirement for the Minister, the new Petroleum Upstream Regulatory Authority (PURA) and the Energy and Water Utilities Regulatory Authority (EWURA) “to ensure transparency”. (Articles 5(1)(e), 14(1)(d), and 31(2)(m)(3))

Second, the bill allows PURA to make “details of all agreements, licences, permits and any amendments to the licences, permits or agreements whether valid or terminated” and “details of exemptions, variations or suspensions of conditions of licence and permit” available to the public, for a fee. (Article 92)

Third, the bill requires EWURA to establish a National Petroleum and Gas Information System (NPGIS), most of which “shall be available for inspection by the public”. This will include a Central Registry of Petroleum Operations (CRPO), containing information on (a) petroleum supply and use by type, quantity and region; (b) petroleum importation by type, quantity and source; (c) petroleum exportation by type, quantity and destination; (d) refinery products by type, quantity and source; (e) petroleum or petroleum products in transit; (f) a record of all licence applications, grants, variations, transfers, suspensions and cancellations; and (g) all relevant information on the holders and their operations and installations. (Article 125)

It must be noted, however, that there are also some articles providing for confidentiality – e.g. for “proprietary market data” – some of which may possible contradict the requirements for transparency. As such, working with this law (even assuming it gets passed in something resembling its current form) to deliver transparency may not always be straightforward.

In the Oil and Gas Revenue Management Bill:
(This bill applies to the whole of the United Republic, both Zanzibar and Mainland Tanzania).

The bill establishes an Oil and Gas Fund, to be fed by revenues from royalties, Government profit share of oil and gas produced, dividends on Government participation in oil and gas operations, and corporate income tax on exploration, production and development of oil and gas resources.

The bill then requires that collection and deposit of oil and gas revenues into the Fund and disbursement from the Fund must be transparent and accountable. In particular, “for the purpose of transparency and accountability, the records of oil and gas revenues and expenditure in whatever form, shall simultaneously be published by the Minister in the Gazette”, and also “be published online on the website of the Government and Ministry of Finance”. (Article 18).

In this case, there is no mention of confidential information being exempt.

Finally, in the Tanzania Extractive Industries Transparency and Accountability Bill:
(This bill applies only to Mainland Tanzania).

The bill (which covers mining as well as oil and gas production) establishes a Tanzania Extractive Industries (Transparency and Accountability) Committee, make up of five members each from government, private sector and civil society. The committee’s functions include (a) developing a framework for disclosure by extractive industry companies of revenues due or paid to the government, (b) collecting from government and companies accounts of revenue paid to government, (c) collecting from companies details of the cost of production, capital expenditures, volumes of production and export data, (e) investigate discrepancies. Essentially, this puts the Extractive Industries Transparency Initiative into law. (Article 10)

The bill goes further, requiring the Committee to “cause the Minister to publish” (a) “all concessions, contracts and licenses relating to extractive industry companies”, (b) “individual names and shareholders who own interests in the extractive industry companies” and (c) “implementation of Environmental Management Plans of the extractive industry companies”. These are to be published “in the website or though a media which is widely accessible”. (Article 16):

TEITI Bill article 16

 

And the bill ensures that there is no doubt as to whether this includes contracts signed before the law comes into force. “All Mineral Development Agreements and Production Sharing Agreements or any other agreements signed prior to coming into operations of this Act, shall, upon coming into force of this Act, be subjected to disclosure requirements under this Act.” (Article 27)

Some initial thoughts:

(This is a quick analysis based only on a first look at the bills, so my views may change.)

There are some remarkably clear and unambiguous requirements for transparency in these bills. Most obviously, this includes the publication of all existing and new Mineral Development Agreements and Production Sharing Agreements. This has not been done before in Tanzania, though it has been called for many times by many actors and had come to feel inevitable. But to have it so clearly stated in law is a big step forward, particularly as it goes beyond the requirements of the Extractive Industries Transparency Initiative (EITI) and Tanzania’s OGP commitment to contract transparency in extractives.

Further, the bills also require that a lot of different information should be made public – on payments from oil and gas companies to government, receipt of revenues by government, spending from the Oil and Gas Fund, and data from companies on capital investment, imports, production, exports and more. Indeed, so much information is listed for publication that if it all gets published it may even be difficult to cope with the quantity of information being released.

On the down side, there may be room for differing interpretations on what constitutes “proprietary market data” (and similar terms), which could lead to complications and could undermine some of the pro-transparency requirements. Further, it’s a shame that there are some requirements for the public to pay to access information.

But overall, at first glance this looks to be an excellent package of measures to promote transparency and accountability in Tanzania’s extractive industries.

The bills will shortly have their first reading in parliament, and are expected to be rushed through under a certificate of urgency. That may not happen, particularly if significant problems are raised (perhaps by the Government of Zanzibar), in which case they won’t get passed into law until after the elections. That would mean a new government that may or may not prioritise the bills and/or the transparency clauses. A lot could still change.

But for the moment, as far as transparency is concerned, the bills look like a significant step forward.


(H/Ts to Policy Forum, who have posted the bills online (here, here and here), and to @SwahiliStreet.)

 

One thought on “Tanzania’s draft extractive industries laws say a lot about transparency. Highlights and initial thoughts

  1. speraty

    It makes sense that member of parliaments need enough time to read and understand what they are doing before passing the bill. We have noted some of the bills taking /being debated for several days before vetting for them. Any urgency on passing a bill have so many reparcations later which can not be resersed afterwards. Hence the opposition members are right to reject force behind their will.
    Let not push any idea on somebody mind to follow what others are thinking and planning to do.
    The MP being representatives of the people need to be listened well prior to any conclusion on any bill.
    This is the autonomy of all PARLIAMENTS working under any nation.

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