Make petroleum contracts disclosure key in new plan

Disclosing beneficial owners is making public the real owners or beneficial owners of companies. FILE PHOTO | NMG   

By GILBERT MAKORE

Kenya recently released a new Open Government Partnership (OGP) action plan that will run from 2018-2020. It is highly commendable that the government has remained fully committed to this multi-stakeholder initiative aimed at improving openness. However, a closer reading of the new commitments brings to the fore some concerns.

In the previous national action plan that ran from 2016-2018- the government made a commitment to publish oil and gas contracts. It rightly noted that this disclosure would improve natural resource governance and ensure transparency and accountability of the extractive sector. This important commitment was sadly not met or achieved. The government failed to disclose oil and gas contracts over the two-year period.

That there has been poor progress on some commitments is acknowledged in the new action plan. However, failure to achieve results or meet these commitments is largely due to funding and capacity constraints. While funding is needed to convene OGP multi-stakeholder meetings, creating a repository for petroleum contracts and staffing the office responsible for handling enquires- the failure to disclose contracts cannot be wholly attributed to funding and or capacity gaps. Even with the stated funding and capacity gaps, the government could have shown goodwill by taking initial steps to disclose contracts through, for example, making contracts available upon request. If the government was intent on disclosing petroleum contracts, it would have.

Were the challenges related to oil contracts disclosure made known to the OGP steering committee and broader civil society or development partners between 2016 and 2018? This could have resulted in the development of plans to mobilise resources and or innovate for the disclosure of contractions- resource constraints notwithstanding. Were there concerted efforts to mobilise resources and build capacity towards meeting the commitment of oil contracts disclosure? The answers to these questions are not in the progress report and the new action plan.

As it stands, citizens have the right to demand that government provide further justification on why that commitment was not met. Addressing these information gaps helps to ensure citizens have more confidence in the new action plan.

The Kenya Progress Report for 2016-2018 categorically states that no progress has been made on releasing data, contracts, or financial information. The report however, goes on to erroneously state that during the first year of implementation, the Petroleum Bill, which requires a framework for reporting revenues, had been passed. This is not the case as the bill remains just that – a bill- that is yet to be passed into law. Possibly, the report meant that progress had been made insofar as a Petroleum Bill was drafted. Using the phrasing ‘the petroleum bill was passed’- creates confusion as to the actual progress made as there is no Act.

The act of disclosing contracts is simple and requires little to no resources and or capacity, but there is no doubt that the process of getting all political and private sector actors on board – with respect to such disclosure can be a process fraught with complexity and possible gridlock.

While acknowledging the political factors that may impede contract disclosure, the commitment towards disclosure should not have been dropped in the new action plan. Politically challenging and capacity demanding reforms should not be avoided but must be persistently worked on.

The government and other stakeholders to the OGP process have a responsibility to see commitments through to completion. The commitment should have remained and the government should have explored ways of achieving this ambition of publicly disclosing oil contracts.

The failure to meet commitments and surreptitiously dropping them only serves to undermine public confidence in the OGP. While there are some commitments related to open contracting in the new action plan-as currently espoused- they relate more to procurement contracts for public services as opposed to disclosure of petroleum contracts.

It is positive that the government has not necessarily shied away from acknowledging failure to meet some commitments-although it must be noted that assessments towards OGP action plan compliance are done by independent researchers. There is an admitted realisation that some change will be difficult to attain.

It is not all doom and gloom. On the bright side, the government has made important commitments to implement the open contracting standard and to disclose beneficial ownership.

In the new action plan, there is a commitment to publish a central public register of company beneficial ownership information operating in Kenya.

Disclosing beneficial owners is making public the real owners or beneficial owners of companies. This will help ensure that these owners do not hide under a complex web of shell company fronts and therefore contribute to the fight against anti-corruption.

GILBERT MAKORE, Oxfam East Africa Extractive Industries Advisor.