The contracts between British/Irish company Tullow Oil and the Ugandan government have been leaked, and they are not pretty. The UK-based NGO Platform has released a report on the contracts, detailing:
- How the structure of the deals guarantees huge profits for the companies while placing risks and responsibilities on the Ugandan government (p.6)
- The lack of transparency over bonus payments to the Ugandan government (p.7)
- The complete absence of penalties for environmental damage caused by the companies (p.22),
- The legal rights granted to the companies to flare natural gas (p.19)
- The 'stabilisation clause', whose breadth has been confirmed by access to a confidential Ernst&Young audit report (see note 3), which will restrict Uganda's ability to improve its environmental protection and human rights standards in the future (p.27)
Oil-watchers will be aware that Tullow Oil is now opening up in Ghana. Let's hope that the same type of exploitative and ecologically damaging contracts (the 'legal right to flare gas' etc.) will not also happen there.
For now, Tullow Oil should face international condemnation for what it is doing in Uganda.