On Tuesday, January 18, Parliament resumed plenary sittings after an interruption that lasted a little over a week.

The hiatus came after Parliament Speaker Rebecca Kadaga suspended House committee and plenary sittings over Justice Steven Kavuma’s order blocking a debate into the Shs 6 billion bonus payments to 42 government officials who secured tax cash from two oil companies that had refused to pay up.

The resumption of Parliament business came shortly after Eric Sabiiti, a lawyer with Electoral Commission, withdrew a private petition that had resulted in Kavuma’s order.

At the first session since the resumption, Kadaga allowed the mover of the motion, Michael Tusiime (Mbarara Municipality), to table his motion. Later, on Thursday evening, Kadaga directed the Commissions, Statutory Authorities and State Enterprises (COSASE) committee to handle the investigation and report to the House in two months, despite objections to a parliament debate on the bonus payments from President Museveni in a meeting with the NRM caucus earlier in the week. OLIVE EYOTARU transcribed part of the debate on the motion, which will be handled by a House committee.

Michael Tusiime (Mbarara Municipality): I move a motion for a resolution of Parliament to investigate circumstances under which rewards were made to the 42 public officers for winning the tax arbitration case between government of Uganda and Heritage Oil and Gas.

Rt. Hon Speaker, whereas in July 2010 Heritage Oil and Gas sold its assets in Uganda to Tullow Oil for a consideration of $1.5 billion upon which URA issued the parties the tax bill of $434 million; whereas in May 2011, Heritage Oil and Gas initiated arbitration proceedings against Uganda for the release of, among other things, $405 million held by URA following the sale of interest in Block 1 and 3A in Uganda in July 2010; aware that in April 2013, the tax arbitration case between Heritage Oil and Gas and government of Uganda was decided in Uganda’s favour and upheld URA’s assessment of $434 million as capital gains tax; further aware that by a letter dated 26th June 2015, the commissioner general URA wrote to the president requesting that a reward of Shs 6 billion is paid to the 42 public officers, noting that the president, by a letter dated 16th November 2015, agreed to the commissioner general’s solicitation; further noting that government paid out Shs 6bn to the 42 officers.

Madam Speaker, alarmed that there is no legal basis for the payment of such a reward under the relevant laws applicable to the public officers and that government had already appointed external lawyers to handle the arbitration in London at a cost of over $10 million, equivalent to Shs 36bn and a further payment of Shs 52bn, making a total of Shs 88bn.

Further alarmed that the payment of the reward not only amounts to abuse of public funds since the officers were carrying out their normal duties in the course of their employment, but the payment of such a reward out of money contained in the Petroleum Fund and the consolidated fund was irregular, since the same was not appropriated by Parliament as required under the Public Finance and Management Act 2015.

Cognisant of the fact that the payment of the reward will demoralise other public officers who handle assignments but do not receive awards of a similar nature; now, therefore, be resolved that the relevant accountability committee of Parliament investigates the circumstances under which the rewards were paid to the public officers; the names of the public officers involved as recipients; the role played by each public officer in this category; the amounts paid so far in taxes by Heritage and Tullow Oil in respect to arbitration proceedings; the fund on which these monies are kept inter alia and to report to the House within two months from the date of this resolution. I beg to move.

Wilfred Niwagaba (Ndorwa East) Abridged: …It is obvious that the amount of money that was paid to these individuals was paid from the petroleum revenue…My colleague has argued that this payment was morally wrong.

My argument is that this payment is legally wrong and criminally paid…This Parliament was wise in ring-fencing funds from the petroleum fund. Under Section 57, petroleum revenues are supposed to be collected and deposited intact on the petroleum fund and one of the things we would want this committee [to do] is to actually investigate how much has been paid on the petroleum fund, how much has this government collected and how has been withdrawn…Would this petroleum fund money be paid as a handshake?

The answer is no. So, the payment was illegal, null and void abinicio.

Peter Ogwang (Usuk) Abridged: …It is the work of the committee we have proposed to find out from the commissioner general of URA. First of all, who is entitled to be core and non- core, then who is a support staff?

It is evident that some of the staff of URA who made the tax assessment of that money were not considered in that list and yet they were the ones who computed the figures which we, as a country, are proud of today. But you can imagine how dishonest some of our civil servants can be.

If you look at the letter that our sister, Doris… my auntie, wrote, if you look at the philosophy, she wrote in her letter behind the recommended rewards, “Your Excellency, the amount recommended as a reward is an amount that will enable the beneficiaries use the funds for something tangible; to have a legacy to remind them and their offspring of their contribution… to either acquire a decent plot of land, pay for mortgage”… while for me in Parliament, I have to suffer with loans.

Madam Speaker, it is so painful. In my district hospital, they get Shs 109 million as PHC but here people are talking about a mortgage when they are highly paid in this country.

John Baptist Nambeshe (Manjiya) Abridged: I will commence by saluting you [Speaker] for the boldness that you exhibited against the arm twisting (cheers and claps) and against the wedge that had been driven into the doctrine of separation of powers.

Madam Speaker, if you were not to condemn this in the strongest terms possible, it was going to set the worst-ever precedent and it would be a precedent that those that are stewards of public finance would be committing this impunity and remaining at large, scot-free…the culture of impunity in Uganda where people use their positions to perpetuate it should be put to a full stop…I want to use this analogy.

The mother rat hired the services of the cat for a midwife. What happened to the young of the mother rat? Everyone can guess. It is akin to what has happened. These persons are the custodians of our public resources and they are the ones abusing the resources.

Elijah Okupa (Kasilo) Abridged: …There were those who were condemning MPs that we passed a supplementary budget so we should not be the ones questioning this. In no uncertain terms did this Parliament, even the last Parliament, pass a supplementary budget for this.

I want to give you a chronology of the supplementaries that we passed since 2010. For the 2010/2011 financial year, the 9th Parliament did pass Shs 11.942 billion under the ministry of Justice to facilitate government’s technical and legal team in the Heritage arbitration. In February 2012, again the 9th Parliament did pass Shs 6.790 billion as additional funding to cater for expenses pertaining to Heritage arbitration case in London.

In May 2014, under Supplementary Schedule 1 for 2013/14, the 9th Parliament again did pass Shs 3.2467 billion for the facilitation of Heritage Oil and Tullow Oil arbitration case in London. In June 2014, Supplementary Schedule 2, 2013/14, Parliament passed Shs 10.325 billion to facilitate the team.

In April 2016, supplementary Schedule 1 2015/2016, we passed another Shs 10.406 billion to clear the estimated arbitration costs in the case of Total, Tullow outstanding payments to the external legal counsel in respect of legal services rendered…again May 2016, Supplementary Schedule 1 2014/2015, we passed an additional Shs 1.225 billion to facilitate the ministry in order to effectively defend the government.

In May 2016 again, Shs 6 billion was again passed by this Parliament… Madam Speaker, this gives a total Shs 52.455 billion that we passed since the case started. Now the money the public and some colleagues have been saying for defending the Shs 6 billion which was taken as handshake only appears in the Supplementary Schedule 1 2016/2017 which was delivered to the Clerk’s office on December 15, 2016 before we left.

This Parliament has not looked at this supplementary yet…but when you read this schedule, especially the explanatory notes; Under Vote 141 URA, total supplementary schedule is Shs 6 billion for the funding to cater for the arrears of salary enhancement of non-teaching staff. What a shame! This shows that someone was trying to hide the information from us.

Anita Among (Bukedea): …When you look at the Uganda Government Public Service Standing Orders, it provides that rewards can be given and include, among others, cash bonuses.

However, it is unethical and unprofessional for you to solicit for a reward and, in this case, the reward was solicited by the URA commissioner general in a letter written to the President of Uganda. I don’t see any problem with the President…and the same people who solicited for this reward suggested for the amount of the reward, determined the names of people to benefit and also determined the account to be debited to get the money, which was a tax refund account which is not supposed to be debited under the circumstances. When you look at the payment of taxes, there was under declaration of Shs 700 million…

William Byaruhanga, Attorney General: …The ongoing concern over this ex-gratia payment that the president extended to 42 public officers that were involved in the arbitration cases that led to defending of capital gains tax on Heritage Oil and Gas transactions when it sold its interests to Tullow.

In my statement I will specifically address the following; One, the background and transfer of interests by Heritage to Tullow that resulted in this capital gains tax; two, the challenges that government faced in collecting this capital gains tax; three, why the president gave this ex gratia payment…(point of procedure)

Cecilia Ogwal (Dokolo): I have been listening to the attorney general on this matter before us but he is coming out with substance of the case. I am not a lawyer but I was thinking that the motion which we are debating is seeking to constitute a committee that would come up with a report and from this, all this information which the AG is giving us will be contained. I don’t know if the minister is trying to pre-empt or to instruct. I am seeking your guidance.

Speaker Kadaga: Honourable members, I think that it is important for instance for members, especially those who were not in the 9th Parliament, to hear how did it start so that when we take a decision, we are all on the same page.

William Byaruhanga, Attorney General: Having pursued a successful exploration campaign as operator and 50 per cent holder in the two licenses, Heritage, together with Tullow, in 2011 entered into a sale and purchase agreement… (Interruption)… Rt. Honourable Speaker, I am being heckled…the gentleman is heckling me.

Speaker Kadaga: Noooo, honourable members please, don’t heckle.

Ruth Nankabirwa, Government Chief Whip: …We have received from the numerous colleagues who have seconded the motion and one pertinent issue came out that this matter was not extraordinary. There are other people who are doing similar work.

Now, procedurally, when the attorney general prefaces his submission by telling us the genesis so that we appreciate the extraordinary nature of the bonus, shouldn’t we allow him to make his statement and then the House decides that the committee investigates? (amid calls for order)

Niwagaba: This particular motion has been with all MPs for the last one week or so, including the government chief whip, who has been actively involved in making sure that this particular motion is not debated today. Is she in order to stand up and claim that government has not had prior notice of this motion for her to give position on whether to support the motion or not?

Theodore Ssekikubo (Lwemiyaga): I know what filibustering is. Don’t take it kindly and I know how filibustering can cause procedural questions where it doesn’t exist…members, allow the attorney general to finish his part.

Attorney General presents statement
Point of clarification

David Bahati, State Minister of Finance: While we were laying Supplementary Schedule 1, there was an error on explanatory notes for Vote 141…interruption…which should have been a supplementary expenditure to cater for the bonus payment of the team against Heritage Oil and Gas… (Heckles from MPs) Honourable colleagues, this supplementary schedule is a public document and we want to apologise for that error and I lay it on table.

It is true that when I was approached by colleagues requesting for information about this public issue, I officially provided these documents to members. Thirdly, we will be willing, depending on the conclusion of this debate, to provide accountability of how much we have collected for the petroleum account.

Speaker Kadaga: Honourable members, I think you should not be uncharitable. I don’t think it is fair not to accept that a good job was done. On your behalf, when the team returned from UK, I wrote a letter of commendation to the attorney general, URA and Justice Ogoola to say thank you for supporting the country.

Accept that they did a good job but let us question the process. But do accept that they got money for this country but maybe we don’t agree with the process. For me that would be satisfactory. But to say that they did nothing, aaaaah that one is not good.

Henry Kibalya (Bugabula South): …In common practice, when a reward is being given, normally we first recognise them before. Two, a committee is formed to discuss the reward. In a situation where the beneficiaries, including the attorney general, had to form themselves into a committee that will come up with the number of people to receive the rewards; to the extent that the commissioner [general] can forget the driver who was driving her up and down, the drivers that would stay hungry, really gives a lot for us to wonder…

Eric Musana (Buyaga East):…Bunyoro as a region is soiled in abject poverty, but others are enjoying, others are eating. When you look at a serious question, are we seriously in charge? Is NRM in charge?…Is government committed to fighting corruption? Why are we seeing a few people enjoy the national cake when others are spectating?

We need a policy. If we have exceptional people who have really contributed to this government, there would be a policy to guide such rewards, just like we have the issue of medals. We have serious Ugandans who have done a lot but they are forgotten…

Margaret Baba Diri (Koboko Woman): …Madam Speaker, we cannot refuse that these gallant daughters and sons of Uganda have done a really wonderful job. Getting that money is not easy in an international court and if you take Uganda’s corruption where when you put a lawyer and the other person gives you money, you take the money and forget about the case.

But these gallant officers really never asked for bribes. They could have even got more than what was given by the president. Definitely let us find out who the right people are to get the money. Do they deserve to get that amount? Did they all participate? Because this will demoralise those who were not rewarded…

David Abala (Ngora County):…If there is a Member of Parliament who is part of this group, I would propose that this is the time they should come out and tell us, here is the money and today, today, not tomorrow. It is criminal not to talk the truth. Sometimes we claim to be Christians; we go to churches and mosques.

One day, we are going to face God and when we meet him, he will ask, where is the Shs 6bn which you chewed? What are you going to say? I would propose that Cosase handles this matter.

Stephen Mukitale (Buliisa): I want to move an amendment that we don’t only investigate the handshake, which to me is a ransom, but we investigate the whole expenditure by government to-date in oil and gas called recoverable costs to a tune of $3.8 billion.

This has been expended on behalf of this government and we don’t have a value for money audit. This ransom is just an eye-opener of how much looting has been going around. There are issues of transparency and accountability and we have demanded for EITI in vain…

Silas Aogon (Kumi Municipality): …Let us allow this investigation to go on and we must investigate the entire process and money from the beginning to the end. Producing a beautiful daughter doesn’t mean you have morally the power to marry her. Winning a case doesn’t mean that you just take the money the way you want. People of Kumi are suffering because they don’t have food, water, medicine. What are we going to do?

Bernard Atiku (Ayivu): The beginning of this journey and how we conclude it is very important for history…You seconded us to go and witness the proceedings of this case…We were in London for eight days together with the URA team and attorney general then, Peter Nyombi; so when it comes to rewarding, I am wondering where your team that you seconded to go and monitor the process was left? (Laughter)

Herbert Ariko (Soroti Municipality): …The target, in this case, was negotiated outside a legal case which Uganda should have won. It means that we settled for less than the target that we should have got if we had taken the case to the letter.

The section also provides that in as much as possible, rewards to public officers should be non- monetary awards. It says that the scheme shall rely on non- monetary awards which centre on human needs for achievement of recognition responsibility, influence and personal growth… so in this case, the target was solicited and yet in this inquiry, Parliament must be able to ask that awards are given through the employee awards committee…

CD Oketayot (Pader Woman):…Madam Speaker, you say that these Ugandans did a good job in the UK and must be commended. I totally agree but I must say that the intention of giving these rewards was based on manipulation.

And I get so worried if my dear brother, Hon Bahati gets the courage of standing on this floor of Parliament and says there was an error on the supplementary document that was laid here and, my brother, you are getting up now after this motion has been moved.

I want to be frank and tell you that I never expected this from you, the one I know. Supposing this motion had not come; we would have processed the supplementary budget with that error. (Point of order)

Bahati: We realised that this was an error and I have apologised to the whole House. We wrote a letter on the 17th December to the clerk of Parliament to correct the error. So, if you realise an error, correct it, apologise to the House, what more can you say? Is she in order to continue to prolong this matter yet we [have] already apologised and written to the clerk?

James Kakooza (Kabula): I think this is a serious point. Our colleagues in the ministry be careful with the technocrats. I have audited letters which have been written by the technocrats but honestly speaking when you peruse through, there are many contradictions. So, when a member says that,‘please, the errors might not be errors but deliberation,’ it is an eye-opener to our colleagues in cabinet to scrutinise documents you append your signatures on…

Speaker Kadaga: Now, 23 members have contributed to this motion and I have not heard any objection to investigation. So, I want to put a question that this House, ‘do you approve the resolution of Parliament to investigate circumstances under which rewards were made to the 42 public officers for winning the tax arbitration case between government of Uganda and Heritage Oil and Gas?’ Those in favour say aye, to the contrary, no.

Members: Aye

editor@observer.ug