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5 de septiembre | | | |

Illegal confidentiality

Judge forces Uruguayan state oil company to release contract with Total transnational

On August 18, Uruguayan civil judge Alejandro Martinez de las Heras ruled in first instance a requirement for the Uruguayan State oil company ANCAP (National Administration of Fuel, Alcohol and Portland Cement) to present a copy of the contract with the local subsidiary of the French oil company Total, regarding the block 14 of the continental shelf.

The ruling is part of a trial for the access to public information started by the movement “Movimiento Uruguay Libre”, together with the CAINFO (Archives Center and Access to Public Information).

The public company ANCAP did not appeal the ruling, so that by September 9 it has to deliver a copy of the contract.
In Uruguay, confidentiality in oil contracts is illegal. The article 4 of the Uruguayan Code of Mining establishes that the deposits of minerals substances “integrate in an inalienable and imprescriptible way, the domain of the State”. The Code acknowledges those sites have characteristics of public property of the State. State properties are divided in fiscal property and public domain (public property). Examples of fiscal properties are plots, houses and offices. The State addresses them as a private owner and can sell or rent them in any way. The same cannot be done, however, with public property such as parks, beaches or deposits of mineral substances. For this kind of property, the State is just the administrator.

The fact that the deposits of mineral substances are public property implies that the real owner and beneficiary is the general public, so that those assets must be handled with the proper transparency. Confidentiality in contracts for public property is illegal in Uruguay. All valid contracts must be transparent, since they are for the community and whatever is obtained by them for the State must consist a benefit for the country.

In addition, deposits of minerals are non-renewable resources which are depleted with use. The population, as owner of the resource, is entitled to know if the State contracts with multinational oil companies establish conditions that maximize the benefits for the country in exchange for lending a part of the natural non-renewable capital of the subsoil.

Contracts for exploration and exploitation of hydrocarbons between States and oil companies establish the contractor’s obligations with the State and its citizens, and vice versa. These contracts include the expected tax payments and rates of payment agreed with the companies, shares of costs and expenses, environmental and social responsibilities, and development plans.

According to the Revenue Watch Institute, publishing signed contracts with mining companies “helps citizens to assess the benefits and protections received by their country in exchange for providing access to natural resources of public property, and also helps them to control if companies and the government are meeting their obligations.”

The book “Escapar a la maldición de los recursos naturales” (Escaping the curse of natural resources) is a kind of guide for countries that have that goal. The authors, Joseph Bell and Teresa Faria, write: “Disclosure of information throughout an extractive project, from the license for exploration to the cleaning of the project, is essential for the civil society to demand accountability by the government and companies or, in case of disagreement, to press for reforms.”

Neoliberalism and after

Justice forced ANCAP to present the contract with Total. Uruguayan neoliberal governments during the 1990s and early 2000s tried to privatize this State company, one of the most important and strategic companies of the country. A plebiscite with extensive public support avoided the privatization with the popular vote. It is important, therefore, that the same public gets to know the details of these contracts; this was made possible thanks to the aforementioned mechanism of information access.

(CC) 2016 Radio Mundo Real 10 años

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