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Thesis Law 2020 Mushi Shirley Baldwin.Pdf TRANSPARENCY AND ACCOUNTABILITY IN THE LEGAL FRAMEWORK GOVERNING THE UPSTREAM HYDROCARBON INDUSTRY IN TANZANIA MAINLAND By: SHIRLEY BALDWIN MUSHI (BLDSHI002) A thesis submitted in the Department of Public Law University of Cape Town in fulfilment of the requirements for the degree of Doctor of Philosophy Supervisor: DANWOOD MZIKENGE CHIRWA (University of Cape Town) UniversityFebruary of 2019 Cape Town The copyright of this thesis vests in the author. No quotation from it or information derived from it is to be published without full acknowledgement of the source. The thesis is to be used for private study or non- commercial research purposes only. Published by the University of Cape Town (UCT) in terms of the non-exclusive license granted to UCT by the author. University of Cape Town Contents DECLARATION .................................................................................................................. v ABSTRACT ........................................................................................................................ vi DEDICATION ................................................................................................................... viii ACKNOWLEDGEMENTS ................................................................................................. ix LIST OF ABBREVIATIONS AND ACRONYMS ............................................................... x CHAPTER 1 ......................................................................................................................... 1 INTRODUCTION AND BACKGROUND ........................................................................... 1 1.1 THE HYDROCARBON INDUSTRY PROMISE IN TANZANIA .................................. 1 1.2 THE PARADOX OF PLENTY ..................................................................................... 3 1.3 THE TRANSPARENCY AND ACCOUNTABILITY APPROACH TO THE PARADOX OF PLENTY .............................................................................................. 6 1.4 RESEARCH QUESTION AND THE PURPOSE AND SIGNIFICANCE OF STUDY .. 8 1.5 RESEARCH METHODOLOGY ................................................................................. 10 1.6 SCOPE AND LIMITATIONS OF THE STUDY ......................................................... 11 1.7 COURSE OF INQUIRY.............................................................................................. 12 CHAPTER 2 ....................................................................................................................... 15 THE HYDROCARBON INDUSTRY: EVOLUTION AND INDUSTRY ACTORS ........... 15 2.1 INTRODUCTION ....................................................................................................... 15 2.2 DEFINITION OF THE HYDROCARBON INDUSTRY.............................................. 15 2.3 TRANSPARENCY IN THE DEVEOPMENT HISTORY OF THE HYDROCARBON INDUSTRY ................................................................................................................. 17 2.4 INDUSTRY PLAYERS AND STRUCTURE OF THE HYDROCARBON INDUSTRY .................................................................................................................................... 21 2.4.1 Ownership and Access Regulators of Hydrocarbons .............................................. 22 2.4.2 Resource Explorers and Developers ...................................................................... 24 2.4.2.1 National Oil Companies ................................................................................ 25 2.4.2.2 Multinational Oil Companies ......................................................................... 26 2.4.3 Trade and Market Influencers ................................................................................ 27 2.4.4 Third Party Actors ................................................................................................. 28 2.4.4.1 World Bank and IMF ..................................................................................... 28 2.4.4.2 Civil Society Organisations ........................................................................... 29 2.5 THE QUESTION OF THE APPLICABLE LAW ......................................................... 32 2.6 CONCLUSION ............................................................................................................ 33 CHAPTER 3 ....................................................................................................................... 35 THE CONCEPTS OF TRANSPARENCY AND ACCOUNTABILITY .............................. 35 3.1 INTRODUCTION ........................................................................................................ 35 3.2 ACCOUNTABILITY ................................................................................................... 36 3.2.1 Defining Accountability ...................................................................................... 37 3.2.2 Elements of Accountability ................................................................................. 39 3.3 TYPES AND SYSTEMS OF ACCOUNTABILITY ..................................................... 42 -i - 3.3.1 Horizontal and Vertical Accountability ................................................................. 43 3.3.1.1 Vertical Accountability .................................................................................. 43 3.3.1.2 Horizontal Accountability.............................................................................. 44 3.3.2 Systems of Accountability ..................................................................................... 45 3.4 TRANSPARENCY ...................................................................................................... 48 3.4.1 Defining Transparency .......................................................................................... 49 3.4.2 Elements of Transparency ..................................................................................... 51 3.5 CLASSIFICATIONS OF TRANSPARENCY .............................................................. 53 3.5.1 Passive or Reactive Transparency ......................................................................... 53 3.5.2 Proactive or Voluntary Transparency .................................................................... 54 3.6 THE RELATIONSHIP BETWEEN TRANSPARENCY AND ACCOUNTABILITY .. 55 3.7 CONCLUSION ............................................................................................................ 57 CHAPTER 4 ....................................................................................................................... 59 TRANSPARENCY AND ACCOUNTABILITY TRENDS IN THE HYDROCARBON INDUSTRY ................................................................................................................. 59 4.1 INTRODUCTION ........................................................................................................ 59 4.2 HYDROCARBON INDUSTRY TRANSPARENCY AND ACCOUNTABILITY TRENDS IN HOST GOVERNMENTS ....................................................................... 60 4.2.1 Vertical Accountability and Transparency ............................................................. 61 4.2.1.1 Parliamentary Oversight ................................................................................ 62 4.2.1.2 Elections ....................................................................................................... 64 4.2.1.3 Judicial Accountability ................................................................................. 69 4.2.2 Policy Recommendations on Internal Vertical Accountability ............................... 70 4.2.3 Horizontal Accountability Policy Recommendations ............................................. 71 4.3 TRANSPARENCY AND ACCOUNTABILITY TRENDS AMONG OIL COMPANIES .................................................................................................................................... 73 4.3.1 National Oil Companies ........................................................................................ 73 4.3.2 Multinational Oil Companies ................................................................................ 75 4.3.2.1 The EITI’s Company Expectations ................................................................ 76 4.3.2.2 The UN Global Compact ............................................................................... 78 4.3.2.3 The OCED and G20/OCED Recommendations ............................................. 79 4.3.2.4 The United Nations Guiding Principles on Business and Human Rights of 2011 80 4.3.2.5 National Anti-Corruption Laws with a Global Reach ..................................... 80 4.4 CONCLUSION ............................................................................................................ 82 CHAPTER 5 ....................................................................................................................... 84 THE LEGAL FRAMEWORK GOVERNING THE HYDROCARBON INDUSTRY IN TANZANIA ................................................................................................................ 84 5.1 INTRODUCTION ........................................................................................................ 84 5.2 PRE-COLONIAL ERA ................................................................................................ 84 5.3 COLONIAL ERA ........................................................................................................ 85 5.4 INDEPENDENCE AND NYERERE’S
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