South Sudan’s new government must quickly enact oil laws

Global Witness called on South Sudan’s government to swiftly enact the Petroleum Revenue Management Bill, a vital piece of legislation that will govern how income from the country’s oil sector will be managed. The call came as President Kiir named new ministers following a major cabinet reshuffle this week.

“According to oil minister Stephen Dhieu Dau, reappointed following the reshuffle, South Sudan is set to earn US$300 million from oil since production restarted in April,” said Global Witness Campaigner Emma Vickers. “The first tranche of income is due to arrive in state coffers any day now but there is no legal system in place to govern oil money. The new cabinet should make passing the Petroleum Revenue Management Bill a priority.”

The Bill, passed by the Parliament last month but yet to be signed into law, will govern the country’s oil revenues, which make up 98% of the national budget. Specifically, it sets out key requirements for how South Sudan’s oil revenues will be collected, managed, audited and reported, including that:
·         All incomes from oil must be directed to a single account;
·         The incomings, outgoings, and performance of this account must be publicly reported on a quarterly and monthly basis by the Bank of South Sudan and the Ministry of Finance;
·         Monthly savings must be made to protect against the boom and bust of oil shocks, and to provide for future generations.

If passed intact and implemented comprehensively, the Petroleum Revenue Management Bill holds enormous potential to help South Sudan avoid the pitfalls of mismanagement, corruption and capital flight which have plagued so many other oil-rich nations. However, concerns have been raised about the government’s commitment to act on its own disclosure requirements. The Petroleum Act, a separate law regulating the day-to-day operations of the oil sector, was passed last year but so far no information has been published about agreements apparently negotiated since independence.

“Ongoing disputes with Khartoum and the threat of an imminent shutdown mean that future income from the petroleum sector is far from assured so it’s vital that the millions of dollars received now are managed responsibly,” continued Vickers. “The Bill is strong but until the new cabinet passes the law and makes implementation a reality, it is just words on paper.”