How Buganda shaped oil ownership debate

Kampala

On November 9, 1906, a letter was dispatched to British colonies by Sir Henry Campbell-Bannerman.

The two-time Secretary for War had just become Prime Minister of Britain. Addressed from Downing Street, the letter—specifically about the future ownership of oil discoveries— would spark a fierce debate between colonial representatives in Uganda, Kenya and Zanzibar.

“Sir,” it began, addressing the then Secretary of State for the Colonies, the Rt Honorable W.G.A Ormsby Gore, MP. “I have the honour to inform you that in view of the increasing use of liquid fuels [oil] for naval purposes, the Admiralty attaches importance to the reservation to the crown, in all cases in which grants or leases of crown land have been made, in the colonies, of the rights to the Crown to mineral oil”.

Later, a string of terse correspondences all marked confidential and in some cases ‘Top Secret’, began to be exchanged through trusted couriers. This debate would take several years; and as prospects for oil in Uganda started to look promising, the debate heated up.

At the heart of the debate was the situation that had been created in the 1900 Buganda Agreement, sometimes referred to in colonial circles as the Uganda agreement. In seeking to reserve oil for the Crown, technocrats were worried that the Buganda Agreement, specifically Section 17, had given private rights in entirety to landowners in Buganda, including rights to minerals under them.

“The rights to all minerals found on private estates shall be considered to belong only to the owners of those estates subject to a 10 per cent ad volerem (according to value) duty, which will be paid to the Uganda administration when the minerals are worked,” the agreement stated.
It added: “On the land outside the estates, the mineral rights shall belong to the Uganda administration.”

The debate itself divided the political managers of the colonies in Britain from the technocrats, some of who were allied to commercial interests that sought to “work” these minerals.

An opinion of the chief legal advisor to the Crown was sought, but his opinion caused even more consternation and correspondences. In the correspondences that ensued, many questions arose.
Did minerals include oil? If it did not, then how can one reserve mineral oil on private estates created by the Buganda Agreement? How would mineral oil be separated from other minerals? The legal gymnastics that went on belied the political considerations for Britain.

Buganda’s role
Buganda was the centerpiece of the colonial protectorate and was anchored by the agreement, fictionally at least, between two sovereigns, the British Queen and the Kabaka. Most politicos were against introducing legislation, proposed by technocrats in Zanzibar and Kenya, and similar to the Petroleum (Production Act) 1934 of the United Kingdom.

In February 1938, then Protectorate governor Sir Phillip Euen Mitchell summarised the situation thus, “It may be said shortly that private property in mining rights does not exist outside the Buganda province with the exception of 10 square miles held by the native Anglican Church,” he said. “But that in Buganda the rights to all minerals found on private mailo estates and on certain mission and freehold lands belongs to the owners of such estates and lands, subject to the payment of 10 percent to the Protectorate Government,” he added.

Sir Mitchell argued that following the 1934 Act, it made sense that oil (petroleum and natural gas) rights be reserved for the Crown “ in the public interest” through additional legislation. “The position in the case of Buganda land owners, however, presents some difficulty,” he said. He argued that the forces rallying to ring-fence oil had done so only after advances in the use of fossil fuels had opened new opportunities.

Juggling with Buganda law
“The concession of mineral rights in Buganda manifestly included gold and diamonds and though petroleum and natural gas were not singled out for particular mention, there is hardly any doubt that those who made the agreement intended to include everything of value that might be found under the land in the nature of minerals, without specific limitation,” Sir Mitchell argued. He advised against asking Buganda or even forcing Buganda to surrender those rights retrospectively. “There is no doubt in my mind that the Kabaka and his government would protest against this course,” he said.

A practical man, Sir Mitchell also knew that the cost of antagonising Buganda was higher than if the matter were left alone. Geological work had indicated that oil was likely in the Albertine valley, outside the Kabaka’s territory or any private estate owners. Indeed, land in Bunyoro was largely considered Crown land.

Sir Mitchell, therefore, advised that legislation be introduced for the rest of the territory, excluding Buganda.

Buganda’s special status within the colonial matrix aside, it is clear that the root of title to oil is always a subject of political negotiations. No similar debate on the rights to oil has since taken place in post-colonial Uganda, where oil was ‘discovered’ in 2007.

Two years earlier, an omnibus bill, also known as the constitutional amendment bill, had been presented in Parliament, expressly reserving oil for the new crown—the central government.
The bill, like the removal of presidential term limits in the same year, was passed without much debate, either on the subject of public interest or on the inherent rights of other claimants to oil. The political considerations weighed by the colonial governor in Entebbe, have been commuted to Bunyoro by the current seat of power, President Museveni, whose official residence remains in Entebbe.

Bunyoro has been targeted not for separate legislation, however, but ostensibly sequestration.
A ministry for Bunyoro affairs, one of the most recent cabinet positions, has been created and filled by Mr Ernest Kiiza. Mr Kiiza’s political career has been constructed on agitation for the rights of the Banyoro, in the age of not “hypothetical” oil but real oil discoveries. Mr Kiiza also chairs, not unsurprisingly, the Cabinet sub-committee on oil.

The question of ownership of oil or rights to oil remains open, however. Public interest is the subject of new legislation recently proposed by the government in the form of the revised Public Finance Management Act (PFMA).

The architecture of the proposed PFMA is to merge budgeting and accountability functions and laws into one framework. Its main architect, Mr Lawrence Kiiza, who led teams that considered drafts as far back as 2008, argues that the new law will rationalise management of all public sources of revenue, including oil.

The current law
However, parts of the new law, and its old draft, address a root of entitlement that is by default ‘native”. Special considerations are mooted for local administrations managed by the central government as well as the political power in those areas, superintended in the case of Bunyoro by his Highness the Omukama of Bunyoro’s government.

And while the government has proposed a formula for oil sharing, its rationale has not been put to debate, publicly or in manner of the quiet correspondences of yesteryear.
It has been suggested that revenue sharing be determined as a share of the total production in a district or distributed by population size. But where have these criteria been debated?

Within the context of a new debate on the limits of decentralisation as a government policy or the risks of centralisation, a debate on political federation and another on “local content”, what does ownership of rights to oil or other minerals really mean? This debate is as fresh to law and politics as if the 1900 Buganda Agreement has just been signed.

The writer is a former Open Society Fellow working on a book on the politics of Uganda’s oil discoveries from 1913-present.

How britian dealt with buganda issue

Letter. A letter by the then Prime Minister of Britain to British colonies about the future ownership of oil discoveries spark a fierce debate between colonial representatives in Uganda, Kenya and Zanzibar.

1900 Buganda Agreement. In seeking to reserve oil for the Crown, technocrats were worried that the Buganda Agreement had given private rights in entirety to landowners in Buganda, including rights to minerals under them.

War forward. Sir Mitchell, therefore, advised that legislation be introduced for the rest of the territory, excluding Buganda.

Current status. The Constitutional Amendment Bill, expressly reserving oil for the central government was two years ago passed without much debate, on the inherent rights of other claimants to oil.

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