Contrary to reports that Parliament had terminated the controversial coffee agreement deal between Government of Uganda and Uganda Vinci Coffee Company Limited (UVCCL), Deputy Speaker Thomas Tayebwa says the deal will be returned, with minor changes.
Last week, Parliament relied on a report by the Committee on Trade, Tourism and Industry to terminate, in public interest, Government’s deal with Uganda Vinci Coffee Limited, Committee on Trade, Tourism and Industry that recommended cancellation of the agreement the government signed with Uganda Vinci Coffee Limited, a foreign company that had been given exclusive and monopoly-like rights to purchase Uganda’s coffee.
The committee, whose chairperson is Mbarara City South MP Mwine Mpaka, ruled that the deal was illegal and that it should be terminated.
“Officials who committed the Government to such illegalities should be penalized as a deterrent mechanism to stop similar occurrences in future. The Government is directed to terminate this agreement and report to Parliament, within six months from the date of adoption of this report,” Mpaka submitted.
“Upon termination, the Government should regularize its relationship with Uganda Vinci Coffee Company Limited through proper due diligence, due process and proper stakeholder consultation before any further business can proceed. Thus initiating fresh negotiations.”
In its report, the committee also concluded that awarding UVCCL exclusive rights would threaten the existence and the businesses of the country’s other 47 licensed processors while favouring a company which has failed to meet its agreement obligations.
“Whereas Government spent colossal sums of money to grade, fence, backfill the land allocated tune of shs7 billion and had relocated the power lines over the proposed factory site, UVCCL had not commenced nor undertaken any activity as envisaged in the agreement. The only structure on sight was an askari house made of iron sheets,” noted Committee boss Mpaka.
“[Clause 4.2 of the agreement] means that no export of super quality coffee beans shall be allowed by Government until the quantity required by UVCCL is attained. Further still, a monopoly is created in favour of UVCCL since it controls the prices it pays for the coffee beans supplied to it.”
Also of concern was the manner in which the agreement was signed. “The failure to sign the agreement by UVCCL brings into doubt the legality of the agreement since a party to the agreement did not append a signature. It is a known legal principle that a person who does not append a signature on a document is not bound by it. This seems to have been deliberate attempt to frustrate any possibility of terminating the agreement by either party,” said Mpaka.
Although Parliament adopted the committee report just last week, Deputy Speaker Tayebwa says a few changes will be made by the government before the deal can be granted another lease of life.
Tayebwa has revealed that a meeting has been held with President Museveni. That it has been resolved that some clauses be revised. The Ruhinda North MP also assured farmers that their coffee wouldn’t be taken away.
“What I can confirm to you is that no body is going to take away your coffee,” said the deputy speaker.
“We had a meeting with the president and agreed to change a few things in that controversial coffee agreement. The president shall soon give the nation an update regarding the same matter.”
While delivering his address on the rising commodity prices and state of the economy on May 22, Museveni said he would soon talk about the coffee deal. (Read Museveni’s Full Speech Here).
“I will touch on the issue of the so-called coffee deal that was being discussed in Parliament the other day. I could see fundamental disorientation in the position of some of the speakers that were speaking in Parliament,” the president said on Sunday.
