African Democracy and Oil: A Combustible Mix

Over the past three years, Revenue Watch has carried out parliamentary capacity building pilot projects in Ghana, Tanzania, Sierra Leone and Uganda. These projects sought to help national parliaments improve their oversight of the oil, gas and mining sectors and to form more effective alliances with civil society and the media.

Keith Myers acted as lead trainer in a number of Revenue Watch oil governance and contracts workshops in Uganda, Ghana and Sierra Leone. In this article, he offers his own reflections on the opportunities and challenges associated with parliamentary capacity building in Africa.

For the past two years I have worked with parliamentarians in African nations that have recently discovered oil, providing training to members of parliament (MPs) and helping analyze new oil policies and legislation. I was motivated by the conviction that parliaments are central to good governance—representing the voice of the people, making laws and holding the executive to account. I still believe that, but the complex challenges posed by oil wealth in today's Africa means parliaments across the continent struggle to fulfil these roles.

Two years ago, I was invited by a senior MP from a ruling party in an African country to visit the parliament building after I led an oil workshop for MPs and civil society. We sat in the members' canteen as he ate lunch and watched the live TV coverage of a parliamentary debate. His business card listed his parliamentary committee memberships on one side; on the back were his business interests in a school, a hotel and a travel agency.

"You need to be wealthy to be an MP in Africa," he explained, noting that his constituents expected him to personally fix social services for them, such as schooling fees and road repairs. But the wealth necessary for effecting these changes leaves some MPs with conflicts of interests between political responsibilities and business interests. Multi-party democracy had only recently been restored in the country, the MP continued, and, he said, "We are still getting used to it."

African MPs representing the interests of their constituents may also clash with powerful elites. The MP I spoke with in the parliament building explained that he was from a rural area where oil had recently been found. Consequently, some of his constituents were driven off lands they had used for livestock grazing, by outsiders apparently linked to the country's elite. The MP claimed he had tried to represent his constituents' needs but had been subjected to many threats. It was too dangerous for him to continue to championing their interests and he wanted an outside NGO to take up their cause. The message was clear: to be an MP representing the voice of your constituents against the interests of the elite can be dangerous. African MPs need not only to be wealthy, but also brave.

Another challenge that MPs face is fulfilling their legislative duties. In almost every jurisdiction outside the US, a nation's sub-soil resources are owned by its citizens, through the state. Oil is not a renewable resource and its exploitation impacts both today's and future generations. Law-making therefore requires a long-term vision for both national development and the role of oil and gas in it. Without this vision, large oil revenues can be captured for the short-term gain of those in power. However, I've witnessed that achieving a consensus around a long-term vision is often problematic in many African democracies.

Tribalism is never far beneath the surface and is a major barrier to achieving a national consensus. For many Africans, tribal allegiances are strong, but there is weak identification with the nation. Crafting unity in a nation created by imposed colonial boundaries remains a distant concept—witness the imminent breakup in Sudan—and often impedes efforts to garner widespread support for a national oil or mining policy. Failed efforts to build national consensus around policy objectives can lead to situations like Ghana's, where the country has begun oil production without coming to agreement on a national oil policy, instead following an outdated law drafted in 1984 with few regulations to ensure the country derives the maximum benefit from its finite resources.

Another common weakness in African law-making is the lack of detailed technical regulations and enforcement. An oil law on its own is not enough. Oil production is a complicated and hazardous business. Without adequate technical regulations and an effective regulator, countries can take on enormous risks. Regulations and a competent regulator are too often absent. Deep water wells, like the BP well in the Gulf of Mexico that spilled millions of barrels of crude, are regularly drilled off Africa's shores. Foreign oil companies and their contractors effectively regulate themselves in places like Ghana and Sierra Leone. The lack of explicit regulations gives too much leeway for officials' discretion in approving activity, and too much risk of their making personal gain from their official position.

Any African MP who wants to hold their government to account for its stewardship of the oil sector will have to work with two fundamental deficits: scarcity of information and a lack of knowledge to interpret it. The MPs I worked with struggle to access oil sector data and often possess neither sufficient knowledge of the oil industry nor credible research support to analyze what information they could obtain.

For example, foreign petroleum companies have discovered a billion barrels or so of oil in Uganda's Lake Albert region. Most Ugandans I met assumed that they had been sold short by either their government or the oil companies. In fact, in my review of the contracts the Ugandan government negotiated, the agreements were tough and compared favourably with other countries. The problem was that MPs did not have reliable access to the contracts, which had confidentiality clauses, leaving only leaked copies available. In one workshop in Uganda, there was an angry exchange between the chair of the parliament's Natural Resources Committee and its members, as the chair insisted members had been given access to the oil contracts for review and the members claimed they had not. The argument went on for over an hour and was not resolved. If MPs can't even agree whether or not they can access the contracts, how can Ugandans have trust in the system? "We don't need to publish them," one Ugandan lawyer joked, with telling cynicism about the country's governance. "If you pay an official at the Ministry a few dollars they will photocopy it for you. Corruption has some advantages."

There are so many difficult decisions to make about oil governance and yet energy is being wasted on arguing about MPs being allowed to view copies of petroleum agreements. One MP came up to me and said, "I know you think we are aiming at the wrong target, but we have to shoot at something."

I am under no illusions as to the challenges for MPs and oil governance. Tribalism is a barrier to national policymaking. Most MPs struggle to represent their constituents against the vested interests of the elite, while a minority see election as a means for personal enrichment. Oil laws are still written without a national consensus on the role of the oil sector in the country's development. Detailed regulations are unwritten or unenforced. Lack of information and knowledge leave MPs with formal power but no means to actually hold government to account.

However, across Africa I met courageous and able MPs, hungry for knowledge about oil, who want to make a difference. In 2010, I saw Sierra Leonean MPs from the governing party and the opposition commit themselves to work together towards national consensus on oil policy. The same year, Ghanaian MPs rejected the government's draft petroleum exploration and production bill following cross-party training on oil governance, insisting that the bill provide for a new independent regulator. After a training in February 2010, a group of Ugandan MPs submitted a petition to publicly disclose oil agreements. In June 2010, Uganda's portfolio minister submitted seven signed oil contracts to parliament—but with a clause prohibiting their public disclosure. The Ugandan MPs continue campaigning for contract disclosure and have sought the opinion of the country's attorney general on this matter.

African MPs have a tough job and need continued support from NGOs and international organizations. The World Bank, IMF and UNDP have neglected African parliaments and should do more to engage with and support parliaments in their essential role in African governance.

Keith Myers is an oil and gas analyst and advisor to the Revenue Watch Institute. He was formerly a geologist and negotiator for BP in West Africa and an Associate Fellow at Chatham House.