The True Oil And Gas Narrative

Here’s What Uganda Has To Do, For Citizens To Benefit From Oil


Last week, six countries of East Africa International Oil Companies from the globe and representatives of civil Society converged in Mombasa, Kenya for the 9th East African Petroleum Conference and Exhibition (EAPCE) under a well-thought through and carefully chosen theme: ‘East African Region – the destination of choice for oil and gas investment opportunities to enhance socioeconomic transformation.

Carefully chosen because Ugandans have since 2006 been debating the possibility of reaping benefits from the industry, with a balanced mix of optimism and pessimism in the local and national discourse. I am constantly in the business of authoritatively arguing that development of oil and gas resources in Uganda holds a great promise to the socio-economic transformation of the country and its people.

I am also convinced by the reasoning of the pessimistic minds around me because there are many references in Africa against which their case is built. This, therefore, means that government of Uganda needs to be mindful of the challenges associated with the industry and constantly be informed by various experiences over the world that unsustainable development of the oil and gas industry can undermine the socio-economic wellbeing and environmental sustainability in the country.

Uganda is moving into the field development and commercialisation phase of the petroleum value chain, with a good record of commitment from government and private sector to addressing key social, economic and environmental concerns. This is the game changer.

It is critical for Uganda to safeguard the environment and biodiversity from negative impact of oil and gas. Many oil and gas developments are located within the Albertine Rift, which is the most important conservation area on continental Africa with 52 per cent species of all birds in Africa, 39 per cent species of all Africa’s mammals and 19 per cent of all Amphibian species, which contribute immensely to tourism revenues in addition to the numerous ecological values.

As such, Uganda needs to put in place specific measures such as defining critical habitats, which should be placed off-limits to oil and gas developments for long-term conservation and associated local livelihood benefits.

If petroleum activities are to take place in such areas, the best available practices and technologies must be adopted to ensure the long-term conservation of the environment and associated local livelihoods.

Mitigation and environmental management measures such as Strategic Environment Assessments (SEAs), Environmental Sensitivity mapping and Environmental and Social Impact Assessment (ESIAs) should continue to be effectively implemented. In addition, it is important to ensure public access to ESIA/SEA information in a simplified manner to enhance effective input in these processes by all stakeholders. It would be empowering for oil and gas companies to put in place mechanisms to conduct and publish annual social and environmental compliance audits.

Amid the many milestones registered in the implementation of the 2008 oil and gas policy, there is a concern that the current mechanisms of stakeholder engagement are weak and ineffective. Communities are not adequately consulted and where attempts have been made to consult them, they are not provided with adequate advance information to enable them make informed contributions. Therefore, to address this vivid concern, stakeholder engagement be institutionalised in all oil and gas processes.

Government must provide prior and adequate information to project-affected communities and ensure consultative processes and procedures are aligned with traditional grievance and communication mechanisms as well as the guiding legal frameworks. A feedback mechanism should involve appropriate levels of management and address community concerns promptly, using an understandable and transparent process.

To enhance the ability of local Ugandans to benefit from the sector, government needs to enhance local content through deliberate and sustained efforts, which include operating a specialised fund for local capacity building, deliberate skills training; licensing requirements for a specific and gradual increment of local staff (national and host communities) in proportion to expatriate staff to effectively and beneficially participate in the petroleum sector.

Local firms should be encouraged to develop local capacity and eventually favorably compete with expatriate companies.

There is anxiety of land ownership and attendant rights. Petroleum activities have been noted to impact on enjoyment of land rights of project-affected communities. Disregard of land rights goes against the fundamental human rights for local communities and individuals to own land and property. Fundamentally, it blocks citizen’s sight to benefits from the sector.

Government needs to sufficiently address and make required legal and institutional provisions to safeguard the right of local communities and individuals to own land. In addition, compensation should be holistic and not simply monetary. Strict adherence to the principle of free, prior and informed consent (FPIC) to protect the rights of communities likely to be affected by key petroleum activities, will go a long way in ensuring protection of community and individual land rights.

Finally, there is need for transparent revenue management and sharing mechanisms. Uganda must have adequate legal, institutional and fiscal instruments that guarantee a fair share of revenues from the oil and gas resources. The regulatory architecture should be strong enough to guarantee constant checks and balances as well as to proactively monitor the revenue management and sharing mechanisms.

I posit that oil is a blessing. You and I can choose to keep it that way or make it a curse.

Ivan Amanigaruhanga (Author of this article) is an environmental and social compliance specialist.