Uganda: Govt Tightens Rules On Expatriates in Oil Sector
Posted on :Thursday , 3rd September 2015
In a move meant to boost the participation of more Ugandans in the oil and gas sector, government has set stringent rules on hiring expatriates.
Dozith Abeinomugisha, an assistant commissioner in the petroleum directorate in the ministry of Energy and Mineral Development, says the rules are meant to regulate expatriates in the sector. Abeinomugisha was on Wednesday presenting a paper on the progress of oil and gas sector to The Observer staff. The African Centre for Media Excellence organised the presentation.
The new rules, Abeinomugisha explained, restrict international oil companies (IOCs) from bringing into the country expatriates to occupy positions that qualified Ugandans can do. The rules also apply to all companies that seek to participate in the oil industry.
"We have coordinated with the ministry of Internal Affairs to ensure that no expatriate will get a work permit unless he or she has a recommendation from the Permanent Secretary in the ministry of Energy and Mineral Development," he explained. He emphasised that the recommendation will be personally signed by the permanent secretary.
Abeinomugisha said that before an expatriate is issued with a work permit, any firm seeking to bring in an expatriate will have to advertise the job and seek out local workers first.
In case there is no Ugandan qualified for the job, the permanent secretary will then allow the ministry of Internal Affairs to issue a work permit to an expatriate for a specific time frame. He said after hiring an expatriate, an oil company will be required to train Ugandans such that by the time the work permit expires, there are Ugandans qualified to take up the job. In addition, they will require the companies to submit a nationalisation plan to the petroleum authority.
A nationalisation plan is a plan that details how Ugandans will gradually manage the sector by taking strategic positions in the oil companies. Oil companies are also expected to submit procurement plans for goods and services as well as jobs annually at the beginning of the year.
"An expatriate's work permit will not be renewed. It is a policy we need to pursue," Abeinomugisha said.
The issue of expatriates is a concern in Uganda's oil industry because of the hefty pay that foreigners earn compared to their local counterparts. In 2013, the Daily Monitor newspaper ran a story about how Tullow Oil Uganda paid a one-man consultancy firm, South African-based Kevin Consult, a staggering $3,500, approximately Shs 12 million at the current exchange rate, daily for one year to teach its officials about "organisational effectiveness."
The story also noted that Tullow paid another foreign consultancy firm, Montrose Associates, $769 million to evaluate its corporate social responsibility in Uganda. Some industry players say there are Ugandans or Ugandan firms that could have done similar work if the contracts had been advertised. However, Tullow defended the payment, arguing the cost was born by Tullow group and therefore not recoverable.
The Petroleum (Exploration, Production and Development), Act 2013 provides that a licensee should within one year after the grant of a license, or every after one year, submit to the authority for the approval of the detailed programme for recruitment and training of Ugandans.
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