November 30, 2012 (JUBA) - Despite delays in resumption of South Sudan oil production, the country’s new oil laws over a blueprint for transparency and accountability practices in the industry, the campaign group, Global Witness said Thursday.
The group, in a report, entitled ‘Blueprint for Prosperity: How South Sudan’s new laws hold the key to a transparent and accountable oil sector, also outlines the major opportunities and challenges government faces in ensuring that management of the country’s oil wealth is responsible and open to public scrutiny.
“South Sudan’s new oil legislation contains strong public reporting, revenue management, and contract allocation requirements,” said Dana Wilkins, a Global Witness campaigner.
She added, “But laws are only as good as their implementation. The real test will be in whether or not the government follows through with these commitments.”
Land locked South Sudan recently announced it was postponing the planned re-start of its oil production, shut down early this year, over insecurity concerns with neighbouring Sudan. Oil supports nearly 98% of the young nation’s annual budget.
The two Sudans, on 27 September, reached an agreement on a number of outstanding issues between them, including on security, borders, citizenship and oil in the Ethiopian capital, Addis Ababa.
On Monday, however, South Sudan President, Salva Kiir, said oil flow would take much longer than expected, after Khartoum reportedly imposed new pre-conditions for the country’s crude oil to pass through its pipelines.
Khartoum, Kiir said at the opening of the governors’ forum, now demands the new nation to disarm Sudan People’s Liberation Movement-North (SPLM-N) rebels, currently fighting in Sudan’s South Kordofan and Blue Nile states.
“The SPLM-N has been recognized by the AUHIP [African Union High Level Implementation Panel] as having a political base that needs a solution. The SPLM-N should instead be negotiating directly with Sudan government,” the president told the forum.
“This is impossible. We are in a different country and SPLM-N is in a different country. How can a foreign army cross to another country and disarm forces there? It cannot happen,” he added.
Global Witness, in the 29 November report, also expressed concerns that the new oil sector deals were reportedly “negotiated and awarded outside the transparent bidding processes.”
Since then, it adds, “No oil production data has been published, and it is not yet clear if exploration and production sharing contracts will be made public.”
Building a transparent and accountable oil sector in South Sudan will require serious political engagement from the government, major capacity building, and consistent implementation of the blueprint set out in the new legislation, the report recommends.
The campaign group, meanwhile, urged South Sudan government to pass the draft Petroleum Revenue Management Bill, immediately and ensure that strong provisions for the collection, management, auditing, and public reporting remain intact.
It also called for urgent implementation, by concerned ministries, of the requirements for transparent contract allocation, and for the publication of production data, contracts, and quarterly and annual oil revenue management reports.