Irish Aid, Tullow Oil and Uganda
November 3, 2012

Quite a storm erupted in the Irish media last week when it was reported that four million euro of Irish Aid funding to Uganda had gone missing in a suspected fraud. The money was destined for spending on education, policing and continuing the fight against AIDS and HIV. Seventeen officials in the Office of the Prime Minister, the Central Bank and the Ministry of Finance have been suspended and two others have been charged. (1)

Foreign Minister, Eamon Gilmore, immediately suspended further aid payments and dispatched a team of Irish officials to Kampala to investigate the allegations of fraud – which were first reported to the Irish government by the Ugandan Auditor General.

There the story rests for the moment.

However, digging a little deeper into the history of Irish aid to Uganda reveals a rather more complicated picture than the unfortunate Irish citizen being ripped off by some crooks in the Ugandan administration.  The current Irish aid programme to Uganda was initiated in 2010 while Micheal Martin was the Minister for Foreign Affairs.  It is worth 166 million euro over a four year period.   It came at a time when intense negotiations were in train between international oil companies and the Uganda government over contracts to develop the country’s burgeoning oil industry. One of the major players involved was and continues to be Tullow Oil. (2)

Tullow was the brain child of Roscommon born accountant Aidan Heavey who founded Tullow Oil in 1985 while he was working in Tullow Engineering and built it up into a major international oil business over the next two decades through various acquisitions and deals all over the world.

Heavey was one of the major movers behind the establishment of the Private Sector Forum in 2004(3) which recognised ‘the need to focus on trade as a means of development’ and ‘challenged’ the Irish private sector to get involved.  The initative at government level was driven by Fianna Fail’s Michael Kitt, then Minister for Cooperation and Development, and, coincidentally, a shareholder in Tullow Oil.

A not for profit organisation named Traidlinks, mainly funded by public money from Irish Aid, was established. (4)   The board consisted mainly of Irish executives whose companies have continuing interests in Africa and included Tony Barry of Barry’s Tea, Jim Corbett of Bewleys, Liam Fitzgerald of United Drug and Adrian Heavey of Tullow Oil.   It is interesting to note that Tullow is registered as a UK company and no longer has any particular connections with Ireland.

Curiously enough, 2004 was also the year when Tullow acquired the Energy Africa company which held an interest in oil exploration around Lake Albert. Tullow continued to expand its interest in Uganda over the following years and signed an ‘early production agreement’ with the government in 2006.

In January 2001 Tullow bought the exploration rights held by Heritage Oil in the country shortly before President Yoweri Museveni was returned to power in an election that the opposition described as fraudulent and that many international observers described as flawed.

Allegations of bribery and corruption emerged in December 2010 when Wikileaks released cables appearing to show that Tullow executives had briefed the then US Ambassador to Uganda Jerry Lanier that the company had given bribes to government officials. (5)  Ugandan MP, Gerald Karuhanga, subsequently presented documents to parliament accusing Tullow of making payments to PM Mbabazi, Minister of Foreign Affairs, Sam Kutesa and Interior Minister Hilary Onek.  Tullow have claimed that the documents are forged and have released emails from the Met Police which cast doubt on their authenticity. (6)

Meanwhile, back in Uganda it appears that legislation on oil exploration remains mired in controversy in parliament because of a power struggle between internal factions. Last week the Ugandan government took back an exploration block jointly owned by Tullow, China’s CNOOC and France’s Total SA after their license expired. (7) CNOOC and Total had bought into a partnership with Tullow in February of this year for a total of 2.9 billion dollars.

Its interesting to see the amount of Irish media coverage given to what appears to be a fairly minor case of corruption in the Ugandan government while it appears that almost none has been given to huge sums sloshing about in its oil industry.  Perhaps it would be wise not to ask too many questions.

Back in September the Department of Foreign Affairs and IBEC’s Engineering Enterprises Federation launched a major new report as part of the Winning Business in Africa programme which identified over 100 new projects worth a potential 12 billion euro. (8)

With that kind of money at stake there’s unlikely to any kind of close examination into the ethics of doing business in East Africa.

PaddyJoe  November 3 2012


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