An Assessment of The Legal and Policy Regimes on Local Content in Uganda’s Oil and Gas Industry

Abstract

Many countries engaged in oil and gas production are introducing requirements for participation commonly referred to as ‘local content’. The purpose of the study was to assess the legal and policy regimes on local content in Uganda highlighting gaps in the existing legal and policy regimes and recommending areas of reform with specific objectives to provide an in-depth assessment of the efficacy of oil and gas local-content legislation in Uganda; to compare and highlight lessons learnt in the implementation of the local content policy in Uganda, Nigeria and Norway; and to provide recommendations on local content policy best practices for the Government of Uganda in oil and gas industry. The study is premised on the conceptual framework that independent variables of legal and policy regimes should deliver dependent variable of local content in Uganda’s oil and gas industry and analyzed the theoretical framework of local content policy (LCP) indigenous firms’ participation and infrastructure contingent theories. The study found that government is employing Product Sharing Agreements (PSA) with contractors to involve local content where Articles 17 and 18 of the Model PSA provide for local content for purchases in Uganda and employment of Ugandans respectively. The Petroleum (Exploration, Development and Production) (National Content) Regulations 2016 have tried to fill the gaps presented by the Petroleum Acts 2013and PSA. The study concludes that Uganda has so far done well to have the Local Content Policies in place before commercial oil has been delivered to the market. The study concludes that Local content in the oil and gas sector in Uganda broadly focuses on involving citizens in the sector. This is through training and building capacity for citizens, technology transfer, employment and service provision. The research recommends that Parliament should pass a law to provide for local content specifically to provide for a better definition of Ugandan business entities, an independent authority to monitor compliance with national local content plans as well as monitor the development of national capacity among others besides creating an institution to manage local content. The study further recommends capacity building for training institutions which are targeting providing labour for the oil and gas market as well as increase in inclusion in decision-making and participation of citizens.