Kenya says it will publish contracts, join global transparency initiative.
Buried in the news of President Obama’s first official visit to Kenya last month was the announcement of important “joint commitments” by the U.S. and Kenya to address serious corruption and transparency problems in Kenya.
The commitments come at an important time for Kenya, following the 2012 discovery of a potentially major oil field in Turkana County – one of the poorest and most marginalized parts of the country – and the recent agreement between Uganda and Kenya on the route for their oil export pipeline. It remains to be seen, however, whether the government will follow through on their commitments.
That said, the commitments are an important first step, and a true win for the Kenya Civil Society Platform on Oil and Gas. The platform is a body Oxfam helped to establish and support since the oil discovery that has long called on the Kenyan government to implement the Extractive Industries Transparency Initiative (EITI), and wrote to President Obama before his visit asking him to push for more openness in Kenya’s extractive sector.
Judging by the commitments, it worked.
Under the joint commitments, the Kenyan government has pledged to take two important steps related to extractive industries:
- Join EITI, making it a part of a global multi-stakeholder program designed to increase the transparency of the financial windfall many resource-rich governments receive from developing their oil, gas and minerals. Kenya pledged to establish a government focal point for EITI implementations within six months and
- Adopt a “transparent policy and legislative framework” for the oil and gas sector, including the adoption of a transparent process for licensing (or awarding) oil and gas blocks as well as publication of contracts between oil companies and the government.
It should be noted that the EITI does not currently require disclosure of contracts, but it is crucial that citizens, parliamentarians, journalists and others have access to these agreements so they have the information necessary to hold companies and their government to national and international standards.
A year ago, alongside the US-Africa Leaders Summit, I asked Kenya’s President Uhuru Kenyatta if he would agree to disclose contracts, to which he responded with an enthusiastic, “absolutely!” Still, no contracts have been made public by the government in the year since that commitment, even though the chairman of Tullow Oil, which operates in the Turkana block, has also expressed a desire to release their agreements in Kenya as they have in Ghana.
Putting the right legislative and policy framework in place has taken on renewed urgency now that a major milestone on the road to production has been achieved. Kenya now has the opportunity to translate its transparency commitments into legal requirements with the Petroleum (Exploration, Development and Production) Bill slated for passage later this year. Additionally, Kenyan good governance advocates have an opportunity to use their government’s commitment to release its second “Open Government Partnership” (OGP) National Action Plan before the end of 2015 to push for greater openness in extractive industries, more government budgets and expenditure information, and more opportunities for citizen engagement in government decision-making processes.
For its part, the U.S. says it will share its EITI experience with “stakeholders in Kenya,” including through reciprocal visits between Nairobi and Washington and support to local governments and civil society to help them understand the EITI process.
Missing from the joint commitment statement, though, was a pledge from the United States to push its own Securities and Exchange Commission (SEC) to finish the implementing regulations – or “rules” – for the extractive industry transparency provision (Section 1504) under Dodd Frank Wall Street Reform Act passed by Congress in 2010. Last month marked the fifth anniversary of the law, commonly referred to as Section 1504, which requires any oil, gas or mining company reporting to the SEC to disclose its payments to governments around the world down to the project level. Last month marked the fifth anniversary of the law and many companies continue to make deals and payments in secret in resource rich countries around the world. .
Now that President Obama has flown home and Nairobi traffic has returned to “normal”, what, if anything, will happen with these joint commitments?
Making pledges or commitments during high-level visits and summits is a well-known tool of state-craft, and Kenyan and U.S. officials have made commitments before, without much to show for them. With Oxfam backing strong collective advocacy voices in the form of the Kenya Civil Society Platform on Oil and Gas to hold their government to these commitments we hope this time will be different.