Proposed local content law to wait a little longer

When Kassanda North Member of Parliament, Patrick Oshabe Nsamba was granted leave to introduce a Private Members Bill, many thought that a new law to regulate local content would be in place by the time Uganda draws near to the drilling of the first oil in Bunyoro Sub-region.

Uganda has 6.6b barrels of oil reserves discovered underground and preparations are in high gear to start drilling the resource. However, government and the oil sector stakeholders have been putting a lot of emphasis on the local content so that the indigenous communities and companies benefit especially in the area of supply of labour and services.

One of the ways to ensure that Ugandans benefit from the opportunities coming with oil and gas was to have a National Local Content Act. At least that has been the dream of Nsamba as he was granted leave of Parliament to introduce a Private Member’s Bill entitled the National Local Content Bill, 2017.

This legislation has suffered set backs since it was first passed in 2020. The first setback was in 2021 when then Speaker the late Jacob Oulanyah ruled that work that was not completed by the 10^th Parliament would not be rolled over to the 11^th Parliament.

Nsamba had to reintroduce the Bill again in 2022 but after being passed, in January 2023 it was returned by President Yoweri Museveni advising that the law should include East African goods as part of those to be covered by the Local Content.

The President’s concern in a letter dated January 19, 2023 was in respect of Section 4 which gives preferential treatment to Ugandan goods, works and services. He said that this contracts the East African Community protocol on free movements of goods.

“The section should be amended to read East African Goods, works and services, instead of Uganda” reads part of the President’s letter.

Parliament on March 28 passed the Bill again after Nsamba reintroduced it and legislators agreed with the President to put emphasis on goods, works and services produced in East Africa as opposed to only goods produced in Uganda.

When the country expected Museveni to assent to the Bill that had now catered for his concern, he returned it again on August 1, 2023 citing other sections that needed to be revisited by Parliament.

This time, the President said that Section 1 should amended to allow the Minister of Trade, Industry and Cooperatives negotiate the local content in the agreements to the extent possible.

Museveni citied the impracticability of the section which stated that a Local Content Act shall apply to a local content entity whose activities are finance through public borrowing or such arrangements.

“This is not practical since each development partner has its own policies and guidelines that are negotiated before the commencement of the project” the President noted in his letter.

MP withdraws Bill

Now, Nsamba, the mover of the Bill has withdrawn the National Local Content Bill, 2023 following its return by the President last month.

Nsamba told the House plenary sitting presided over by Speaker Anita Among on Thursday August 31, that he would return to seek leave to introduce the National Content Bill.

“At an opportune time, I will seek leave of this House to introduce the National Local Content Bill again having thoroughly considered the amendments that are being proposed,” Nsamba said.

Nsamba, a member of the opposition National Unity Platform (NUP) argued that the Bill has been repeatedly amended by the Committee on Finance hence losing the intention for which he introduced it in the first place.

“The Bill was an affirmative action law for Ugandans to ably participate in the provision of goods, works and services. It was, however, modified to provide for prioritisation of the East African Community partner states which offends the very title of the Bill,” he added.

He said that other East African Community partner states are prioritising their own nationals for provision of goods and services yet the Bill’s amendments sought to give them priority equal to that of Ugandans.

He drew support from Bugiri Municipality legislator, Asuman Basalirwa who appeared to suggest that the National Local Content Bill has been handled selectively. Basalirwa gave an example of the recent passing of the Veterinary Practitioners’ Bill, 2023 that sought to allow practitioners from EAC countries to be registered in Uganda.

“We got information that other East African countries are not doing the same. As we are opening up, they are closing. I support the Honourable Member in withdrawing the Bill to ensure that his intention is preserved,” said Basalirwa.

It is not yet clear whether the government would takeover the task of introducing a similar Bill since the President had picked interest in the Private Member’s Bill that has now been withdrawn.