Communique issued 30th January 2015
Introduction :The Africa Institute for Energy Governance (AFIEGO) in partnership with Refinery Affected Residents Association organized a half day meeting with the refinery affected people of Kabaale parish, Buseruka sub-county Hoima District. The meeting was organized under the theme: Understanding the nature of compensation from government and the need to defend your property rights. It brought together over 30 refinery affected residents' whose case that was filed in the High Court and is still waiting for determination. The main objective of the case is to compel the government to stop forcing the affected people from accepting and signing for inadequate and unfair compensation and resettle those who asked for land within a period of three months.The objective of the meeting was to discuss the emerging issues in the communities and update the residents on the progress of the case. The meeting followed a visit by officials from the Ministry of Enery and Mineral Development (MEMD) and Strategic Friends International (SFI) - the company working with MEMD to implement the Resettlement Action Plan for the oil refinery which includes compensating the affected people. Following the visit, it was reported in the media that the people who had filed the case had changed their mind and were now willingly signing the compensation documents to receive the money that they had originally rejected.The stories created an impression that the affected people were no longer interested in the case. It is in response to the above stories that AFIEGO and partners organized the meeting in the affected villages to share with the people.
In the meeting, the affected people indicated that the MEMD and SFI were in Kabaale five days ago telling people that they were being given the last chance to sign and get compensation. That if they didn't sign, they would be evicted without compensation after all their case had been dismissed. They also indicated that 2 members had signed on the compensation documents due to unbearable suffering. Their kids had spent over two and half years without going to school, their grass thatched houses had collapsed and many other problems.
In response, AFIEGO lawyers explained to the residents that the case against government was in court for determination and they were working hard to get a new hearing date. The participants were encouraged not to be bullied into signing for unfair compensation but to keep strong and wait for court decision. From the deliberations the participants made the following observations:
1. The government of Uganda is taking advantage of their desperate sorry state, to trick or force the participants to sign for unfair and inadequate compensation which they had earlier protested as a violation of their constitutional right to prompt payment of fair and adequate compensation.
2. The participants observed that it has been more than two years of suffering and uncertainty since the cutoff date in June 2012 when government stopped them from using their land. The people have since not been able to conduct any form of development, including cultivation of perennial crops, depriving them of livelihoods.
3. Further still only two people among those that filed a case against government signed for the unfair and inadequate compensation but this does not mean that the constitutional violations had been addressed. In any case, the people signed not because they liked the compensation but because of suffering.
4. Government is using isolation and misery to force the affected people into signing agreements that violate their rights: The participants observed that even those who signed only did so to save their lives. What some people want now is to minimize the damage by accepting anything from the government to struggle and start a new life.
5. Physical and psychological suffering :Participants noted that those who had rejected the inadequate compensation as well as the ones who opted for resettlement have been isolated and live in bushes .They do not have access to basics like clean water, health centres, schools and markets.
6. Schools turned into police stations: It was observed that the only two primary schools at Nyahira and Kyapaloni in Kabaale had been turned into police stations for the last two months. This ended the little hope they had that the government would rethink and improve the education for their children. They observed that the government was no longer considering them as citizens.
7. Affected people still committed to soldier on in court: Participants emphasized that they are still in court and committed to soldier on until they get justice. They are ready to pay the cost. They are confident that court will give them justice and will protect them from further violations.
8. The participants noted that the move by MEMD and SFI to take the advantage of people's misery and suffering to force them into signing on the agreements that violate the right to prompt, fair and adequate compensation is absurd and unfortunate. It is an assault on the Constitution and every good Ugandan should fight it. That evil will never prevail against right.
After the discussion and appreciation of the challenges affecting the refinery people, the participants made the following recommendations for action:
1. The government of Uganda should respect the rights of the refinery affected people to prompt payment, fair and adequate compensation by immediately compensating them at a prevailing market value for their land and crops and resettle those who asked for relocation.
2. The High Court of Uganda should determine the refinery affected people's case expeditiously because justice delayed is justice denied.
3. Respect for court process: the government/MEMD and SFI should respect the court process by avoiding issuing of statements in the press that people had abandoned the case.
4. The Government should drop the plan to amend Article 26 of the Constitution or any other plan that has an effect of undermining the rights of Ugandans. Similarly the proposed amendment should be rejected by Ugandans as will increase the violations to property rights in the country. Since it is because of the case that now the government wants to amend the Constitution to give herself powers to exercise the powers of compulsory acquisition before payment of fair and adequate compensation.
We shall continue to be at the fore front of defending respect for human rights, and stand with the refinery and other affected communities until they get justice. We appeal to the courts to ensure that cases of human rights are given priority in hearing because they are the core of human dignity.
1. Dickens Kamugisha, AFIEGO
2.Kiwedde Geofrey ,chairperson Refinery Affected Residents Association
In this issue, you will read about our work to strengthen youth leadership to promote transparency and accountability in Uganda's oil sector, how government is taking advantage of the suffering and frustration of the refinery affected people to force them into signing for low compensation, our campaign against the proposal to amend Article 26 of the Constitution that will empower government to compulsorily acquire property before payment of adequate compensation, our gender mainstreaming campaign and how Women's lives can be improved through more informed energy-sector interventions drawing on a gender approach. We would like to remind you that it is always a pleasure having you read The Energizer.AFIEGO Newsletter January 2015.AFIEGO Newsletter January 2015
communique by the youth, 29th january 2015.
In the months of November and December 2014 and, January 2015, AFIEGO and youth leaders from different parts of Uganda organized five workshops in the districts of Buliisa, Hoima, Kampala and the Universities of Makerere and Kyambogo. They also held various meetings with guild presidents and their officials from 8 universities. In total, over 877 people participated from 13 universities, 21 local governments, 6 religious and 3 cultural institutions, 9 youth associations and other groups. The workshops focused on the ongoing oil production development processes in the country. Our core objective was to help the participants especially the youth leaders to appreciate the critical areas of decision making regarding the oil production processes as a means to empower them mobilize the rest of the public to demand for transparency in the oil development processes.
The workshops were in response tothe delays surrounding the production of Uganda's oil. It should be noted that since the discovery of oil in 2006, several promises have been made by the government and companies on the time when Ugandans should expect to start enjoying the oil revenues and other related opportunities that come with production. Unfortunately, to date, the citizens are still waiting and no one is coming out to explain why. For example, the Early Production Scheme (EPS) that was promised in 2008 did not materialise and some Ugandans are still waiting. Then, in 2011, a promise for a full refinery was made; again, we haven't seen anything. All these are making Ugandans anxious. They are waiting for oil to address their problems. Amidst the delays, unemployment, quality of education and school dropouts, health and other services are worsening. So, the workshops and meetings were intended to enable the youth to discuss and make recommendations for action.
At all the workshops, presentations were made on 3 key questions;
• First, why is Uganda taking too long to commence oil production?
• Second, who is responsible for the delays and who benefits or loses as a result of the delays?
• Third, why is the government not mobilizing and working with the citizens to maximize the oil benefits for the common good?
The presentations and discussions of the above questions helped the participants especially the youth to recognize with gratitude the positive progress made in Uganda's oil sector including the confirmation of over 6.5 billion barrels of oil reserves, the formulation of the 2008 Oil and Gas policy, the enactment of the Upstream, Midstream and Downstream oil laws, the appointment of the officials of the National Oil Company and Oil Authority of Uganda, the establishment of Kigumba Petroleum Institute and teaching of oil related courses in other Ugandan tertiary institutions as well as training of others in Universities abroad, the progress on the acquisition of land for the refinery, progress on putting in place a national local content policy, progress on looking for the refinery investor and many other developments. However, theyobserved that while there are many good things happening in the sector, there are also others going in the negative direction especially regarding lack of transparency regarding on oil production processes, use of oil revenues that were generated as Capital Gains Tax, land acquisition for the refinery and other ol activitiesas well as other human rights violations and environmental challenges.
Based on the above presentations and discussions, the participants made the following observations:
2. Observations by the participants
a. They observed that the connivance of the Government and Tullow Oil to disregard the Parliamentary resolutions of 2011 that led to the signing of the MoU between Tullow Oil, Total and CNOOC in 2012, is the reason why the government and companies are taking long to agree on how to manage the oil sector. They ignored the resolutions with the argument that it would delay the production but later, they were caught in their own game. Unfortunately, while the leaders and the companies are also affected by the costs of such impunity, the biggest victims are the citizens (the owners of the resources).
b. That the available evidence shows that in 2012 when Tullow Oil entered into a Memorandum of Understanding (MoU) with Total and CNOOC, Tullow committed to certain conditions and was sure that every decision by the companies and government would be happening within 6 months as per normal industrial practices. It was this confidence that made Tullow Oil to book all the farm down funds in its accounts as income. Unfortunately, the disagreements between the government and the companies regarding whether the best development option was a refinery or a pipeline or both lasted for over two years and nothing could move before settling the disagreement.
c. They further observed that while a consensus to build both a refinery and a pipeline was reached by the parties, it stills remains too costly for Uganda to produce her oil using two expensive options. That under the MoU between Tullow, CNOOC and Total, Tullow Oil had a Special Responsibility to ensure that everything happens as per the MoU. But when the delays continued as a result of the disagreements regarding the best development option, Total and CNOOC decided not to pay the farm down balance to Tullow As a result, Tullow Oil has had to write down over $500 million as income not earned. This may scare away potential investors.
d. That both the companies and the government should appreciate that time is money and as such, they should do everything possible to follow industrial practice.
e. Further, that there is need for the government and companies to agree on the Production Licenses (PL) in order to move forward. Companies do not have the PLs for Blocks 1 and 2 at the moment. Only CNOOC has a PL for Kingfisher
f. That without production licenses for all the blocks, it may be difficult to make a Final Investment Decision (FID), a decision that must in place before the commencement of oil production. That while the introduction of a number of taxes on the ongoing oil transactions by the government is good and has already increased our revenue collections to fund over 80% of our budget, most of the said taxes such as VAT, the import tax, the withholding tax and others are taxes on oil investments rather than profits. That while such taxes are good for a poor country like Uganda, they have the potential to delay production and increase the recoverable amounts because they make the sector operations too expensive.
g. That while it is okay to build a refinery and an export pipeline or an export pipeline alone, the oil market realties cannot allow Uganda to rely on a refinery alone. And now that the crude oil prices are below a $60 mark, it even makes things more complicated for the country.
h. That in the event that the companies such as Total and CNOOC refuse to fund a refinery, the government may be compelled to give guarantees to private companies to secure funds for building of a refinery and if the refinery fails to make profits, it will be Ugandans to lose through taxes
i. They further observed that the whole production infrastructure will require around $15 billion and this is almost ¾ of Uganda's current GDP. And they wondered which International Financial Institutions (IFIs) will be willing to invest in such a project when there is no transparency and some things such as the final investment decision are not yet in place?
j. That unlike Ghana which has access to the ocean and her oil is off shore, Uganda is a land locked country and her oil is on land, and, as such, it must contend with all the challenges of land acquisition and community issues which make the production process even more costly in terms of money to invest and time to settle issues with communities.
k. It was further observed that the evidence available indicates that to date, the oil companies in Uganda still do not believe the refinery as the best development option for Uganda. It appears that the government has failed to convince the companies about the value for money regarding the need for a refinery. These disagreements may continue to undermine the country's capacity to maximize the oil benefits.
l. They were concerned that the government is not doing much to create effective create public awareness on the recently passed revenue management Act that shades light on the sharing of oil revenues between the central government, local governments and the communities.
m. There is still a lot of endemic poverty and unemployment which dis-empowers the youth and all the citizens from effectively influencing the oil sector development processes effectively. This is a big challenge as it increases mistrust and suspicion between the government and the people.
n. It was further observed that the local communities have continued to lose their land to oil investors and land grabbers. Instead of the government to protect the affected communities, it is in the process of presenting a proposal to parliament to amend Article 26 of the Constitution to the effect that Government has powers to compulsorily acquire someone's property before payment of a fair and adequate compensation. The participants warned that if such proposal is effected, it will be the beginning of the oil curse in Uganda. Many Ugandans will become landless and may fight back, hence conflict.
o. That there are no indications that the decisions regarding the refinery or a pipeline are taking into account the challenges of climate change and its impact on ecosystems. To date, Ugandans do not know the environmental and human rights trade-offs they must prepare to make if a refinery is built compared to a pipeline. Government is not providing such information to the citizens. For example, the government displaced over 7000 people from the 29sq km of land in Kabaale Hoima before conducting a Social and Environmental Impact Assessment. As a result, for close to three years, the government is still failing to resettle all the affected households.
p. That generally, the oil sector is suffering from lack of transparency and this is the reason why mistrust and suspicion in the country is worsening. Indeed, other than the executive, all other institutions including the parliament, in real sense, remain stakeholders of facade.
In view of the above presentations, discussions and observations, the participants from all the workshops and meetings made the following recommendations for action:
3. Workshop Recommendations
i. Do not amend Article 26 of the Constitution: While the existence of Article 26 of the Constitution that provides for the right to property and protection against property deprivation has not been very successful in shielding Ugandans especially the local communities from the injustice of unfair, inadequate and delayed compensation and, land grabbing, the proposed amendment whose net effect is to legalize the injustice, will worsen the situation. We call upon the government to avoid such draconian laws for the good of our country.
ii. Organize a national stakeholder conference on the best development option for Uganda: In order to reduce the expectations and anxiety amongUgandans, the government should urgently organize a meeting of all relevant stakeholders and present evidence supporting the decisions of building both a refinery and a pipeline. They should also use the same meeting to explain why there are endless delays in the oil development processes. What are the social, economic and environmental gains or tradeoffs of each development option that Ugandans should prepare for?
iii. Transparency: The government should ensure that there is maximum transparency in the entire production process including decisions regarding assessing the field development plans, issuance of production licenses, making of the final investment decisions and others. Transparency will build confidence and trust in all actors and most importantly, allow government institutions to operate with efficiency.
iv. Respect the Parliament: No oil producing country has ever succeeded without an effective parliament that is strong enough to make laws and use its oversight powers to ensure that such laws are implemented and enforced by the executive based on the principles of a free and democratic society. The parliament in Uganda is lacking in great detail. It is driven by the executive and this is costing the country heavily. The dignity and sanctity of our parliament should be restored to enable it play her legislative and oversight roles.
v. Build civic competence of the citizens: A country is as strong as its own citizens. Since independence, Ugandans have gone through decades of torture and repression to the extent that they perceive every government as too dangerous to question or even engage. Further, most Ugandans still live in poverty with many immediate problems such as lack of food, paraffin, soap and others .These immediate problems have continued to make it hard for them to participate in public affairs. However, it will be in the best interest of the country for the government to strengthen and empower the citizens to overcome the obstacles that hinder them from participating in public affairs, especially, issues of oil.
vi. Empower the youth to benefit from the oil sector: In the last 7 years or so, the youth in Africa have continued to grow in numbers amidst decreasing opportunities. As a result of their numbers, they have been key in influencing governance processes across the continent. For example, in countries such as Tunisia, Egypt, Libya and others, the youth played a big role in the overthrow of governments because they felt that those governments were denying them opportunities. We therefore recommend that the government of Uganda should urgently empower the youth and ensure that they benefit from the oil sector. This will ensure peace and stability in the country now and in the years to come
vii. Disclose how the oil revenues are being collected and spent: While oil production has not commenced, we know the government has so far received oil revenues of over $800 million in Capital Gains Tax and licenses. But to date, Ugandans do not do know how that money was used. Failure to disclose such information regarding the little revenues so far collected clearly indicates that upon production, the huge revenues may be misused at the expense of the citizens.
4. Conclusion: The oil sector in Uganda is at a critical stage. We have confirmed reserves of 6.5 billion and the production of these reserves can generate national revenues of over $3 billion per year for the next 30 to 40 years. If we add the above $3 billion on the current $4 billion revenue collections per year that we get from other sector, then, you have a total of $7 billion per year. While this is not a lot of money considering Uganda's population of over 33 million, it is a significant increase that if we invest it in productive areas, its impact can be huge. We can create more jobs, strengthen the education and healthy sectors, provide clean water to every Ugandan, improve agriculture and make many other developments. But if we don't manage the sector well, the negative impacts can undermine even what we already have. It happened in Nigeria, Sudan and many others and, it can happen in Uganda.
For God and Our Country
communique issued by afiego and partner ngos/cbos from the bunyoro sub region at the end of three stakeholder consultative workshops to discuss the process for the procurement of a company to build the oil refinery and to collect views for a private members bill entitled “the right to fair compensation and transparency in land acquisition, rehabilitation and resettlement law, held in bugambe, biso and kiziranfumbi- sub counties of hoima and buliisa districts, between 12th and 14th august 2014
The Africa Institute for Energy Governance (AFIEGO) in partnership with other civil society organizations from the Bunyoro Kingdom including World Voices Uganda, Empagi Zabunyoro, the Bunyoro Youth Forum on Oil, the Green Organization, the Africa Challenge Foundation, the Kyambogo Students Environmental Association, the Kibaale Girl Guides Initiative, the Refinery Residents Association, the Grafen of Butimba and Wambabya, the Kinogozi Womens Association and other community organizations organized 3 seminars at Bugambe, Biso and Kiziranfumbi sub counties to empower the communities on the contractual process for the oil refinery and the process for enacting a new law on compensation to repeal the current Land Acquisition Act of 1965 in order to protect people’s property rights as provided for under Uganda’s Constitution and ensure transparency in the oil sector. The 3 seminars brought together over 178 participants comprising of local leaders, land owners, community elders, CBO leaders, religious leaders, cultural leaders, primary and secondary school teachers and other stakeholders from the region.
At the seminars, the participants were guided through various oil and other related laws and policies regarding the management of oil, human and property rights. The participants were also trained on the legislative powers of Parliament and District Local Councils and how the participants can influence them to enforce the laws. Procurement of a company to build the oil refinery was also covered.
Specifically, the seminars covered 5 key issues; the land question in Bunyoro, the oil refinery development procurement process and its impacts on human/property rights and revenue transparency, lack of transparency in compensation and procurement, poor enforcement of laws and the delay in passing the Revenue Management Bill 2012 into law. At the end of the seminars, the participants identified several gaps in the entire oil development process and made a number of observations and recommendations for action as follows:
1. Outdated laws: The current Land Acquisition Act of 1965 is outdated and does not measure up to Article 26 of the Constitution in as far as the protection of property and human rights are concerned. The situation has been made worse by the failure of the minister for lands to put in place regulations for the assessment and payment of compensation as required by section 20 of the above Act to guide both the central (the Chief Government Valuer) and the District Land Boards (DLBs) to ensure that the rates of compensation they prepare especially for crops and buildings of none permanent nature under section 59 of the Land Act 1998 comply with the dictates of the Constitution. The participants observed that the above failures have contributed greatly to the grabbing of poor people and local communities’ land in the name of development. In cases where the government has tried to compensate the victims, lack of regulations have made it difficult to ensure that such compensation is both prompt and adequate.
2. Failure to enforce the new oil laws: While we welcome the new upstream and midstream laws of 2013 which have some good provisions to promote good oil governance in Uganda, there are no signs that these laws will be implemented to stop the problems of poor compensation and land grabbing. To make it worse, the government is delaying and or failing to publicize the laws to enable the citizens especially the local communities and the affected people to appreciate how to use the laws to demand for accountability and defend their rights.
3. Secrecy in bidding processes and evaluation of the bids: We understand that by the end of this year 2014, the government of Uganda will select a company to build and operate a 60,000bd oil refinery. The selection will be made from the two companies namely “South Korea's SK Energy Company and Russia's RT-Global Resources”. While we commend such government’s efforts to exploit our oil through value addition, the secrecy surrounding the process is unfortunate and a betrayal to Ugandans who had hoped that the new oil laws would ensure that all oil development processes in Uganda would be open and transparent. Secrecy defeats the principles of good governance of transparency, accountability and public participation that would mobilize the public to ensure that we get the right companies to drive our sector for the common good. We believe that while openness and transparency may not be a sine qua non for responsible use of oil revenues, lack of it provides a huge fertile ground for corruption by both the companies and government. Secrecy is an evil and should be avoided.
4. Disagreements between the government and the joint ventures regarding the refinery to process oil against the pipeline to export crude: While over 7,000 people of Kabaale-Hoima district have been displaced and 29sqkm of land secured for the refinery, we are concerned that to date, there is no consensus between the government and the Joint Ventures especially Total E & P and Tullow Oil on both the refinery and the pipeline will be management. Instead, the information available indicate that the current oil companies in Uganda are only willing to contribute money to build the pipeline and not the refinery. To make it worse, there is no evidence to show that any of the two final refinery bidders (South Korea's SK Energy Company and Russia's RT-Global Resources) from which the government of Uganda will select the company to build and operate the refinery has its own money or capacity to borrow enough money to build the refinery. This means that any of those companies will require government guarantees in order to borrow funds from international financial institutions to build the refinery. If this happens, it will be the beginning of an oil curse in Uganda as there will be no pressure on such private companies to make the refinery economically viable to pay back the loans. Whether the refinery makes profits or not, Uganda’s tax payers like us will have to pay the loans.
5. Deliberate payment of Billions of shillings to non existing companies: We note with grave concern that our country is now confronted by a situation where those in leadership are conniving with investors against the citizens. It is sad that even before oil revenues begin to trickle in, we are already seeing billions of shillings being paid to non existing companies. These are hard times and we call upon our fellow citizens to stand up and demand for accountability in order to promote the common good.
6. Weak parliament: The failure by parliament to use her oversight powers to prevail and ensure that the government delivers services to the citizens has continued to render the good laws and development projects irrelevant to the citizens and there is no guarantee that the oil sector will be any different without meaningful reforms.
7. Local communities most affected: In all Africa’s oil producing countries, it’s the local communities that have continued to suffer the worst oil impacts due to poor governance in form of weak institutions and autocracy of leaders.
8. Failure to balance laws, contracts and politics: The existing oil laws including the 2013 upstream and midstream lack clear legal sanctions against bribery, abuse of office and dereliction of duty. The laws also put most of the powers in the executive who continue to use such powers to mix political interests with contracts.
9. The problem of confidentiality of oil contracts: while we appreciate and observe that historically, contracts have been confidential, the world is now moving at a high speed towards disclosure and such disclosure come with many benefits. Making contracts public ensures the integrity of the bidding and negotiations and allows for parliament and the public to own and ensure contracts are enforced and payments made. It therefore gives such contracts the necessary political legitimacy.
10. Lack of publication of contracts: We observe that as a general principle, Ugandan laws do allow confidentiality clauses in the contracts. Experience shows that countries such as Nigeria, Egypt and others used to have confidentiality clauses but it became costly and since then, they have decided to publish all of their oil contracts. In Nigeria, the bids received are also published. Any exception to the disclosure requirements must be very strictly and narrowly drawn. On the other hand, in Sao Tome, the law rejects all confidentiality except for “proprietary Industrial property rights/ intellectual property rights.” More so, the Sao Tome’s law requires disclosure by both the government and the investors and disclosure obligation is a contractual requirement in the license and production sharing agreements.
11. Corruption in public procurement: We observe that this area is the most prone to corruption. At the moment, Uganda lacks laws that can compel all material contracts to be subject to open competitive public procurement. In Sao Tome, any contract is void unless entered pursuant to competitive provisions as required by law.
a). We need a credible company, from a democratic country chosen through an open and competitive process: Considering the social, economic, environmental and political significance of an oil refinery, we call upon the government to ensure that we get a credible investor. This means that the contract to build and operate Uganda’s oil refinery should be given to a right kind of company from a democratic country, even if the financial terms by that company are not the highest. For instance, a company that has a very good environmental record or human rights record or training program or type of technology or local content fitted to Uganda’s oil fields should get the contract. It is therefore necessary that the entire bidding process of selecting the final bidder out of all the six companies which had showed interest in the refinery should be done in the open. The process to select the South Korea's SK Energy Company or the Russia's RT-Global Resources as the company to be given the contract should be subjected to effective public hearings from different stakeholders. And the democratic, rule of law and constitutional credentials of home government of the respective companies should also be a key factor to consider in determining the final company to build the refinery.
b). No government guarantees to private companies to secure loans for the refinery: The government of Uganda should not give any guarantees to any private company contracted to build the refinery. The company should have its own money or capacity to borrow without any government guarantees. This will help our country avoid possibilities of contracting companies that do not have investment capital.
c). Any contract signed with the company should guarantee a large and fair share of profits to the government which increases as oil prices rise.
d). Under the refinery contract, Uganda as a sovereign state should maintain a satisfactory degree of control over all the operations.
e). An independent national oil disputes tribunal should be established to deal with all oil related disputes in the country and minimize arbitrations abroad.
f). The National Oil Company (NOC) and the Oil Authority of Uganda (OAU) should be empowered and supported to effectively safeguard the business interests of the government and ensure strong oil regulation in the country. Now that the officials of the two institutions above have been appointed, they should take responsibility in overseeing the refinery and other oil development processes.
g). All contracts, licenses and MoUs regarding oil development in Uganda should be public documents except only the parts containing intellectual rights.
h) Any officer or government and her agencies suspected of corruption, bribery or any mischief in oil or any other related developments should immediately step aside until investigations are done and completed.
i). We need a new law on compensation to protect the human and property rights of the poor and vulnerable local communities: The new law entitled “The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement” to repeal the current Land Acquisition Act of 1965 and to act as an enabling law for the enforcement of Article 26 of the Constitution 1995 as amended and other laws on property rights should be urgently enacted to stop or at least reduce the suffering of oil affected communities by guaranteeing the right to prompt and adequate compensation in all cases of land acquisition. In cases of land acquisition, the land to be taken should be the absolute minimum determined through a Social Impact Assessment and the proposed development on the land should take off within not more than one year from the date of acquisition.
In conclusion, the participants thanked AFIEGO for organizing the seminars and providing legal guidance to the participants. The participants recommitted to continue working together with AFIEGO to influence policies and ensure that every Ugandan benefits from the oil sector.
Press Release, 05th August 2014
Kabaale, Hoima-Uganda –The human rights abuses endured by the refinery affected people of Kabaale Parish, Buseruka Sub County-Hoima Uganda for the past two years will get a lot worse unless the families who asked for relocation and those who rejected inadequate rates of compensation currently living in isolated ghost villages are rescued immediately before disasters in form of famine, falling houses, lack of health care, education services, clean water, gangs of criminals and snakes roaming the area strike, AFIEGO warned yesterday.
"The over two years of delay by the government to adequately compensate all the oil refinery affected people in Kabaale has exposed the families remaining in the area to untold suffering, and any more delays may result into a disaster no-one can estimate the gravity before the end of 2014," said Dickens Kamugisha, Chief Executive Officer-AFIEGO. If the government does not urgently fulfil her constitutional duty of adequately compensating all the affected people where those who want relocation are resettled in a new area with basic services such as houses, clean water, schools, health centres and roads while those who rejected unfair rates are paid fair and adequate compensation to enable them buy land elsewhere as a matter of urgency, the nightmare endured by the families over the past 2 or so years will be only the beginning. It will worsen and go out of control.
If it cannot compensate the affected people to leave the affected villages, Government should immediately restore basic services for the families especially the vulnerable groups including the over 500 women, 293 children, 170 elderly and 90 widows currently languishing in the villages with no means to access shops, water, schools, health services, no access roads and foot-passes and living at the risk of being attached by dangerous snakes and hungry dogs. "The help to these people must start now." Micheal Businge, AFIEGO's Bunyoro Field Coordinator, said yesterday.
"Continued lamentation of government that there are no funds to complete the compensation and relocation when the Resettlement Action Plan (RAP) being implemented stops the affected families from using their land for any development and the failure to provide social/basic services to the local communities in the area is clear evidence of an oil curse and only serves to confirm the level of impunity for constitutional violations and human rights abuses amidst oil development. These deliberate violations are against Article 26 of the Constitution which protects people's rights to property and states that the right to property can only be interfered with only after payment of fair and adequate compensation to the affected person", Ms. Resty Namuli-AFIEGO's legal officer, said.
The above violations have made it so far impossible for other groups to provide a lasting solution to the suffering being faced in the refinery area. In addition to going to court, AFIEGO together with the group leaders of the affected people has moved in to support the roofing of the houses of the elderly women who had started living in the open, transporting the sick to Hoima town for treatment, supporting the repair of the broken boreholes, sensitizing the people to avoid mortgaging their possible future compensation through loans, supporting the affected families who have some land outside the refinery area with fruit tree seedlings (mangoes, ovacados, guavas, oranges, pawpaws and others) and clearing foot passes from the nearest feeder roads to some households. These are not complete solutions but they are intended to mitigate the suffering and misery as we wait for the court decision to stop the government's excesses.
As the affected people remain stranded, AFIEGO is working with the group leaders of the PAPs to identify the most vulnerable people/families and availing them with any badly needed help possible. In the last one month alone, AFIEGO has helped 31 women and children to get to health centres in Hoima for some treatment, supported a repair of a borehole, encouraged 8 families to send back their children to the nearest primary schools and persuaded other 11 families to avoid loans. AFIEGO, under her public litigation for social justice and human rights initiative is facilitating over 80 families to attend Kampala High Court hearings regarding their refinery case. We need your support to keep the people actively involved.
"Last month, AFIEGO was able to facilitate 30 affected families to attend the first hearing where the High Court ordered against any evictions of the affected people. After the case hearing, we travelled with the people back to Kabaale and visited 39 families considered to be at the highest risk. We found, the number one priority for everyone we talked to was accommodation, food, drugs, and education for children and fear for wild animals. They are already hurting as many of their children have missed the whole year of 2014 and not sure whether they will go in 2015 because the children either cannot walk long distances through the bushes to the nearest schools or they can't walk on empty tummies as they have no food. They also can't send the children to schools while still in Kabaale as they expect to be displaced any day. Those who risk planting short term crops such as beans and sweet potatoes are also in tears as the animals cannot allow them grow to maturity. If you visit Kabaale, the community's suffering is beyond any imagination"
To make it worse, many of the families are being evicted from the trading centres where they have been taking refuge after running away from their falling houses located in the bushes where neighbours left them some months ago. Now, the people who got their compensation and left their houses in the trading centres have come back to take away the materials from the houses to build new ones where they shifted to. Sadly, it is mostly widows and children who are being pushed out of those houses. The current help we are giving is just a drop in the ocean" AFIEGO is currently designing projects that will enable us increase our capacity to engage with the government and other stakeholders to mitigate the human rights violations.
"While the new 2014/15 budget should give hope to provide funds to complete the compensation of the affected people, we doubt the readiness of the government to consider the refinery affected people's polite as a priority. Already, contrary to the Constitution, last month, the parliament dominated by the ruling party MPs including the MPs from the oil region authorised the government to access half of the annual budget (over UGX7 trillion) in the first quarter of the financial year before any discussion of the budget by the House. These are signs which clearly indicate that both the executive and parliament are not about to stick to the rules of governance and without good governance, the citizens will continue to be sacrificed by those in authority" Dickens said.
AFIEGO will continue to work to not only ease the current suffering witnessed in Kabaale "we will also work to ensure that a new law is put in place to address the injustice in compensation across Uganda" our target is to ensure that every affected citizen across the nation should be guaranteed prompt payment of fair and adequate compensation and where this fails, the court system should be accessible, reliable and affordable for everyone to access for redress with confidence and trust.
"in terms of numbers, more than a third of the affected people are still languishing in the ghost villages of Kabaale, over 78 children between the ages of 3 to 17 have missed going to school for the 2014, 53 families have no houses you can call home and no food. Mr. Kamugisha said.
AFIEGO (Africa Institute for Energy Governance) has been operating in Kabaale, Buseruka-Hoima and the Albertan Graben a whole since, 2007. We also work in the rest of the country building the capacity of communities, institutions and influencing policies to work for the citizens. The commencement of the oil refinery development process through land acquisition in Kabaale made it inevitable for us to work with the communities in the area. We are using experiences and lessons from related projects to ensure that our efforts produce maximum results for the affected people.
Media and other line staff contacts
In this Issue you will read about AFIEGO\'s continued efforts to lobby for a new law on land aquisition and compensation,read about the gaps in the existing laws and how the proposed new law intends to close those gaps.The plans for promoting the new law are also highlighted in this issue.Further, you will know much of our work with the district land boards in Hoima and Buliisa where we are building their capacity to protect property rights of the oil affected communities.In addition you will read about our efforts to sensitise the masses regarding wind energy one of the safest clean energy sources that Uganda can tap to reduce modern energy poverty especially in the rural communities, the worsening injustices to the refinery affected people,the need to improve the use of EIA processes to balance oil activities and eviromental conservation needs.Latly you will get AFIEGO\'s views regarding the controversies surrounding the Karuma Power project and what should be done to ensure transparency and to maximize the benefits of big power projects in Uganda for the common good.Enjoy the read! AFIEGO Newsletter July 2014
In this issue, you will get updates on AFIEGO\'s ongoing case challenging the government human rights violations in the oil region and why we think an injunction against refinery project implementers would give Ugandans a chance to reflect, replan and reimplement the project without compromising the lives and dignity of the affected people. You will find out why it is important for you and the media to join the human rights and oil campaign; and why Members of Parliament should come up with a new comprehensive law on land acquisition and compensation. But above all, you will have a vivid glimpse into what the future holds if the refinery process continue violating human rights unabated; and hopefully you will be moved to do something about it.Enjoy reading the Energizer AFIEGO Newsletter June 2014
Read about eviction of refinery affected people, our work with ERA, the need to protect the environment from oil threats, our involvement with youth...
We are glad to introduce you to the first issue of our monthly newsletter. If you want to know more about the plight of the refinery affected people and the unlawful evictions taking place in Hoima district, this is a must read. Also, you will find out why ERA must step up and protect electricity consumers. Read about why we must all stand up and protect the environment from oil threats- even if it means we all join AFIEGO and camp together at the National Environment Management Authority and Uganda Wildlife Authority offices until EIAs involving public hearings (as required by law) are carried out and tangible steps taken to protect our wildlife. Of course, you cannot afford to miss out on the inspiring story of Dickens Kamugisha and his journey from a barefooted village boy to a passionate human rights defender and our work bringing youth on board the energy cause.We look forward to your feedback. Enjoy reading TheEnergizer.AFIEGO newsletter, May 2014
1. Introduction: A promise of expensive but constant electricity
The Uganda Electricity Transmission Company (UETCL) last month announced an increase in tariffs just weeks after ERA announced a 1% reduction. Ugandans have lost track of the enormous tariff hikes that the country has continuously experienced ever since Umeme took over the power sector in 2005. The cost of electricity has more than quadrupled and billing problems and general incompetence in the power sector have chronically hindered growth and development of the sector.
UETCL’s excuse for increasing tariffs was that there is need to utilise thermoelectricity generators that government had earlier abandoned because of the astronomical costs of running them. The government then decided to concentrate on hydroelectricity that it deemed cheaper. Now, UETCL says, it is more expensive to maintain load shedding and idle generators than to put these generators to use. In essence, UETCL is promising that with the generators, there will be a constant supply of high-priced electricity.
2. Irregular generator project
The thermoelectric generators were abandoned in favour of hydroelectricity and small power dams (built to increase supply to make up for what the generators would have produced). From the start, thermoelectricity generation was bound to be a failure. First, it was commenced without a clear policy on how to engage the thermo companies and how their assets would be managed after they are replaced with the dams. How did ERA plan to regulate such companies without a clear policy? Before tariffs rise further, ERA should answer this pertinent question.
3. Ugandans biggest losers in tariff wars
Increased tariffs can never be good news to Ugandans, many of whom live below the poverty line. Their battles with the players in the electricity sector are far from over- a battle Ugandans, led by AFIEGO, took to court in 2010 when they sued Umeme, ERA and UETCL for failing to provide quality, affordable and reliable electricity.
Technically, UETCL is the electricity generator, ERA the regulator and Umeme the distributor. Umeme is the most well known player in the electricity sector in Uganda, enjoying monopoly over distributorship and recording profits each year. However, Umeme has refused to take blame for the increasing tariffs, saying that as a mere distributor, it has no power over tariffs. Umeme insists that it is ERA which has powers to increase the tariffs.
4. Futile public hearings
Ironically, it is the same Umeme that last month defied ERA’s organized public hearing whose objective was to subject Umeme’s application for tariff increment to public scrutiny. In the same breath, Umeme has expressed its determination to increase the electricity tariffs even further (Whether or not ERA agrees) to the chagrin of Ugandans and in defiance of parliament that recently passed a resolution to terminate the Umeme contract.
Even more controversial is the fact that even as Umeme insists that it has nothing to do with the increase in electricity tariffs, it has dragged ERA to the Electricity Disputes Tribunal over the amendments to Umeme license No.48 for the supply of electricity. The tribunal is established under section 93 of the Electricity Act 1999 as the line implementing agency.
Umeme insists the amendments in the license, as per the contracts, necessitate an automatic right to increase tariffs. As we wait for the tribunal decision, Ugandans are increasingly getting trouble in appreciating who exactly is behind the sky rocketing tariffs.
Indeed, the on-going “tariff wars” in Uganda are rather confusing for the general public that, no doubt, have greater interaction with Umeme. Prior to the public hearing, Umeme (the applicant) unequivocally wrote to ERA informing them that they (Umeme) had no interest and would not participate in the hearing. Still, ERA went ahead to hold the hearing on an application whose author was no longer interested. In this case, ERA wasted public resources because at the time of the hearing, the fate of the application was with the tribunal and not the public. Both ERA and the public failed to respect the subjudice rule whose essence is that issues before court should not be discussed.
5. Yaka causing more harm than good
While the roles of other players such as ERA are provided for by law, the people have for long seen Umeme manage the power distribution as if we do not have a regulator. Power consumers continue to suffer with faulty meters, late bills and irregular disconnections. Currently the pre-paid metering which Ugandans had hoped would address power electricity service issues in Uganda seem to be bigger money making machine for Umeme. As we speak, pre-paid customers do not know how much a unit is because Umeme has discretion in deciding the charges. Unfortunately there is no legal framework that can be relied on to hold Umeme accountable. Ugandans are at their mercy.
The prepaid metering was introduced to solve problems like estimated billing and to lower costs of running and distribution. The benefits of the prepaid metering seemed obvious as less staff would be needed as well as less trips to read the meters, prepare and print bills, take bills to the consumer, go to disconnect if a bill not paid in time, go to reconnect if the customer pays the bill and disconnection fees, monitor the consumption...
The meters were also presumed harder to manipulate. Unfortunately, like the post paid meters, the yaka meters are being given to consumers without being tested and certified by Uganda Bureau of Standards to ensure that they are not faulty. Perhaps, it is this reason the yaka meters have not translated into good services and lower costs for the consumers. Instead, people are complaining of inflated bills and high and varied costs of paying the bills.
For example if you pay your bill through mobile money, you get three units of electricity less than those who pay from Umeme offices. Fewer units are also got when you pay at a supermarket or other Umeme-sanctioned points (even though this is less costly than paying through mobile money). The cheapest means remains going to an Umeme office. So people have to spend a lot of time cuing at Umeme offices so that they can pay less money. The time and money spent travelling to these offices make it a very costly option.
6. What then is the role of ERA?
Ideally, it is ERA’s role, as provided for under the Electricity Act Cap 145, to regulate the sector and protect consumers from exploitation. Yet, the regulatory authority had been pushed to the periphery of the sector. Even to the customers, ERA is remote- a mysterious “regulator” whose role appears ambiguous as customers are treated to electric drama.
ERA’s mandate is buried deep in the Electricity Act, the statute that establishes it as an independent authority with an ombudsman over the electricity sector. Still, not many people have heard a chance to read or understand these laws- Certainly the majority of Ugandans who get ripped off by electricity sector politics have not. So, someone should explain to Ugandans on who is telling the truth about electricity tariffs. Ever since ERA established and Umeme got a concession, electricity tariffs have persistently increased
For instance, in 2001, the electricity tariffs increased by 69% for domestic consumers and 56% for industrial users. In 2006, the tariffs increased twice- by 35% in June and by 41% in November. In 2005, the increment was by 24%. In 2012 there was a 69% and 36% for large scale and domestic consumers respectively. January 2014 is when Umeme made the yet-to-be determined application to have a further increase.
In all circumstances, ERA and its flowery roles as laid down under the Electricity Act have been impotent to save consumers
The Electricity Regulatory Authority (ERA) is established under S.4 of the Electricity Act, cap 145 as a body corporate with power to sue or be sued. Its general functions are provided for under S.10 of the Act as follows:
It thus has to:
c. Tariff controls and quality assurance
ERA is also responsible for electricity tariffs. Under the Act it is expected to:
Under S.11 (1) the authority is required to perform its functions and exercise its powers in a manner that is open and objective, fair and reasonable, nondiscriminatory and Promotes fair competition.
d. Supervisory function
e. Independence and impartiality
Independence of ERA while performing its functions is guaranteed under s.16 which provides that:
“The authority shall, subject to the declared policy of the Government and, except as is otherwise provided in this Act, be independent in the performance of its functions and duties and exercise of its powers and shall not be subject to the direction or control of any person or authority.”
7. ERA, a toothless barking dog
S.16 of the electricity Act, while guaranteeing ERA’ s independence, takes it away by subjecting it to government policy and declarations as well as other provisions of the Act.
ERA’s independence thus seems the lowest in the hierarchy of importance and this has also been reflected in the reality of the electricity sector in Uganda. Umeme, for instance, signed a watertight agreement that ERA cannot penetrate even if it wanted to. Under the agreement that government signed with Umeme, Umeme gets hefty compensation regardless of the circumstances of terminating their contract- whether or not it is Umeme’s fault.
How then would ERA effectively report and monitor Umeme’s activities under the Act to ensure compliance with the license provided and also to ensure quality, reliable and affordable electricity when Umeme is clearly an untouchable heavy weight.
Despite a parliamentary report of Oboth Oboth, Salim Saleh’s report, a court case filed by AFIEGO in 2010, damning media reports and public outcry, Umeme continues to operate as if Uganda does not have a government.
Almost ten years after they came into Uganda’s electricity sector with a promise to overhaul and improve it, problems such as load shedding, power outages, negligent deaths due dangerous connections, faulty meters, high tariffs, limited access remain. And then, we must ask. Is this problem that flowery provisions on the role of a “regulatory authority” can solve?
There have however been a few “victories” for ERA- Like the recent 1% reduction in electricity prices. But what is a 1% reduction after half a decade of being fleeced? Half a decade of being a toothless barking dog that cannot hold its own against the strength and might of an internationally and politically connected company like Umeme. What is a 1% reduction when three weeks later an increment is announced? And more increments still loom over the heads of Ugandans. What is 1% when Umeme is in court for automatic tariff increment based on unfair concession agreements through which some government officials committed our country to profit Umeme irrespective of the quality of services? What is 1% tariff reduction and what ERA do when the executive is delaying or has refused to implement the resolutions of Parliament to terminate UMEME’s concession.
8. Conclusion and recommendations
ERA’s functions remain on paper and it has failed to cater for consumer interests and control price hikes. A 1% pseudo reduction in tariffs and half-hearted attempts to “regulate” will have no impact on the recurrent electricity sector problems. ERA remains a weak body operating under the control of some corrupt government officials and electricity companies. It is therefore proverbial toothless barking dog. There is urgent need for the following interventions to address the problems of electricity sector in Uganda.
Eighty six refinery affected people have moved to mount legal action against government for inadequate compensation rates and violations of basic land rights as guaranteed by the 1995 Constitution, the Land Act 1998, the Land Acquisition Act 1965 and other international treaties and policies applicable to Uganda. The plaintiffs, supported by Africa Institute for Energy Governance and other local organizations, fault the government for moving ahead to acquire 29.34 square kilometers of their land in Hoima district to build an oil refinery without adequate compensation for land and other properties. They are also unhappy with the government's delay in resettling those who asked for resettlement.
On 24th February 2014, through their lawyers, Bemanyisa & Co. Advocates, they served the government with a notice of intention to sue. Among other things, the notice of intention to sue demands that government compensates the plaintiffs at UGX6.5m per acre of land and pays a further UGX2m to each plaintiff for denying them their constitutional right to use their property freely. To date, fourteen days have passed since serving the notice and AFIEGO has made a decision to file a case in the High Court of Uganda on 26th March 2014.
Dickens Kamugisha, CEO of AFIEGO, says that people whose land is affected by the oil refinery project have not been able to fully utilize their property since 2012 when government through the Resettlement Action Plan Report of 2012, declared that any development on the affected land after 1st June 2012 would not be compensated for. The government marked 1st June 2012 as the CUT OFF DATE beyond which no compensation would be paid to anyone.
The actions above are unconstitutional as they contravene Article 26 of the Constitution which clearly provides that a citizen can only be deprived of his or her property rights after such person has been promptly paid fair and adequate compensation. Before such compensation, government has no powers to interfere with a citizen's right to his or her property. Section 59 of the Land Act also requires each District Land Board to put in place rates of compensation for crops and buildings on non permanent nature and review them every year to ensure that they reflect the most current property value.
It should be noted that in addition to poor compensation, the refinery affected people continue to suffer many other injustices including delayed relocation, transferring their land before receiving payment, compensation based on outdated rates, denying female spouses from being bank signatories, harassment and intimidation.
"We eighty six people have signed the notice of intention to sue because we are not happy. Government and the Strategic Friends International (SFI) told us that they would not pay any compensation for any new development made on our land after 1st June 2012. It is now coming to 2 years," said Innocent Tumwebaze, spokesperson of the affected people. He further added:
"They haven't paid us for our land and we are not certain about the future. We entirely survive on land for food, income for sending our children to school, health services and our entire livelihoods. Depriving us the right to fully use our land is the biggest injustice we have suffered so far. We no longer have enough food for our families; we can't pay school fees for our children and or provide the basic necessaries to our households. We need help."
According to Mr. Kamugisha, who has been directly helping the refinery affected people to get prompt payment of fair and adequate compensation from the government for their property in line with Article 26th of the Constitution, the entire compensation process has been flawed and unjust to the thirteen communities of Kabaale Parish.
AFIEGO has for the past two years facilitated the affected communities to petition and appeal to every relevant authority in Uganda including the Speaker of Parliament, Bunyoro MPs, the minister for lands, the minister for energy, the minister for Bunyoro Affairs, the Inspectorate of Government, the Uganda Human Rights Commission, the Chairperson Hoima District and the Katikiro of Bunyoro Kingdom for help. While some affected people have been compensated, others are still suffering from the injustice.
"It is now time to take this matter to court for redress. That is the only option we are left with to save communities from the gross human rights violations," Kamugisha said.
AFIEGO is a Ugandan registered public policy research and advocacy NGO whose main objective is to promote good energy governance for the common good and national development.
For more information, please contact:
Legal & Communications Officer, AFIEGO
Phone: +256-414-571597+256-414-571597 , +256700964398+256700964398