Ugandan Miners Challenge Mandatory Transparency Laws

The Uganda Association of Artisanal and Small-scale Miners (UGAASM) is pushing back against a proposed law that would make transparency mandatory for mining companies in Uganda. Kenneth Asiimwe, the Chief Executive Officer of UGAASM, argues that companies are unlikely to invest in audits, reporting, and disclosure if it does not improve their access to financing, markets, or investment opportunities.

Uganda joined the Extractive Industries Transparency Initiative (EITI) in August 2020, committing to greater disclosure of payments by mining, oil, and gas companies and revenues received by the government. The initiative also seeks to establish what companies contribute to communities and the environment. However, Asiimwe likens transparency to lipstick, arguing that disclosure alone adds no economic value to businesses unless it brings tangible benefits such as cheaper credit and better mineral prices.

Asiimwe's position challenges the Uganda Extractive Industries Transparency Initiative's (UGEITI) push for legislation to make company compliance mandatory. UGEITI's annual progress report for July 2024 to June 2025 identifies the absence of a dedicated EITI law as a major weakness. The report says implementation has continued to depend on Cabinet directives and administrative arrangements, limiting the Secretariat's ability to compel timely and complete reporting.

The concerns are reflected in the latest EITI report covering July 2023 to June 2024. Of the 20 extractive entities included in the reporting exercise, seven companies failed to submit their reporting templates by the agreed deadline. Their revenues, according to the Uganda Revenue Authority, amounted to 31.9 billion shillings. The report further indicates that 16 entities did not submit signed declaration forms within the required timeframe.

Asiimwe proposes that the government could use institutions such as the Uganda Development Bank to provide preferential financing to companies that meet transparency requirements. He also suggests that the government could negotiate arrangements with smelters and refineries that make certification commercially valuable to mineral producers. This approach presents a different approach from UGEITI's efforts to strengthen its legal authority and compel companies to provide information needed to account for revenues and other contributions from the extractive sector.

Asiimwe dismissed the assumption that another law would necessarily improve compliance. He argues that the problem of Uganda is over-legislation and that government should examine why existing initiatives work or fail instead of assuming that legislation is the answer to every problem. He cited the International Tin Supply Chain Initiative (ITSCI) as an example of a non-legislative approach that is working effectively.

The debate highlights the challenges of balancing transparency and compliance in the extractive sector. While UGEITI argues that mandatory transparency laws are necessary to ensure accountability, Asiimwe and other mining companies argue that economic incentives are a more effective way to encourage transparency. The outcome of this debate will have significant implications for the future of the extractive sector in Uganda.

Key points

• Mining companies in Uganda say they need economic incentives to encourage transparency, rather than face additional legal requirements.
• The Uganda Extractive Industries Transparency Initiative (UGEITI) is pushing for legislation to make company compliance mandatory.
• The debate highlights the challenges of balancing transparency and compliance in the extractive sector.