Saturday, 8 December 2012

Recommendations for Transparency and Accountability of Tanzania's Natural Gas Policy Draft

by Alykhan

Tanzania has recently seen an impressive increase in oil and natural gas reserves both land and offshore, which has the potential to significantly boost the economy. However, to ensure that this resource is exploited in the most sustainable and beneficial manner for all stakeholders, the Ministry of Energy and Minerals has released a draft policy document (found here).

The document on the whole also contains informative policy direction on issues of environmental conservation, management of revenue and public-private partnerships in the natural gas extraction process and should be read by all stakeholders.

Given our interest in freedom of information and transparency, Uhuru Blog will review the current policy statement on Transparency and Accountability (Section 3.2.2 pg 15) and make our recommendations based on global best practices.


Objective: To ensure transparent and accountable system in the management of the natural gas industry. 

The Government shall:
(i) Promote transparency and accountability in the natural gas industry; and
(ii) Facilitate collection and dissemination of information related to natural gas industry to stakeholders.
(Tanzania Natural Gas Policy Draft October 2012)

We believe Transparency and Accountability is an important, probably the most important, pillar that will ensure natural gas contracts are awarded in the most competitive manner and that the citizens of Tanzania receive their fair share of the proceeds from this industry. Any information that will be kept secret has the potential to be exploited for corrupt practices and therefore the Natural gas Policy should promote complete access to all information regarding terms and conditions of the contracts signed as well as details of the revenue received. 

Our criticisms are as follows:
1. The policy recommendations are too broad and lack any specific measures on how the government aims to promote transparency and accountability. 
2. It is also weak in identifying key specific ways in which the government will collect and disseminate information to stakeholders. 

In the introduction, the policy paper mentions Tanzania's membership in the Extractive Industries Transparency Initiative (EITI) as a signal of the intent of the government to ensure transparency. However, we believe EITI is not sufficient as the reports released are outdated (the most recent one is from 2010, 2 years too late!) and mining companies voluntary divulge information and are not compelled to share information. Citizens need the most recent information updated atleast monthly, on the status of incoming revenue and what those funds are earmarked for to be effective. 

Here are our recommendations (some of which are derived from Transparency and Accountability Initiative's report on Opening Governments: 9. Extractive industries pg 33 found here)

Policy #1. Ensure a competitive bidding process for oil and natural gas contracts and concessions by making all rules and regulations available in a public database, with clear definitions and explanations.

Policy #2. Make public the terms of each concession and contract awarded by the state to exploit oil and natural gas. This will enable stakeholders such as ordinary citizens, civil society organizations as well as other companies bidding for the contracts to determine whether the government has accepted the best deal.

Policy #3. Publish regular and detailed reports (ideally monthly or quarterly) of revenue received from various concessions of oil and natural gas. This has to be disaggregated by revenue received by individual companies and concessions awarded. Reports should also detail how all the revenue revenue is earmarked and used for various development activities.










Our recommendations cover all stages from pre-award of concession to the transparent use of revenue received and will ensure that corruption is completely eliminated from the entire process. We hope the Ministry of Energy and Minerals take our recommendations seriously and amend the natural gas policy to make it truly transparent and accountable.

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