Seeking Benefits and Avoiding Conflicts from Uganda's Oil resources

8/3/2019 Seeking Benefits and Avoiding Conflicts from Uganda's Oil resources

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Seeking Benets and Avoiding Conficts:A Community-Company Assessment of

Ugandas Hydrocarbon Industry


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This report was prepared by Ivan AmanigaRuhanga andJacob Manyindo together with Rani Parker, James VanAlstine, Margaret Barihaihi, Henry Bazira, Gloria Namande,and Noreen Nampewo. This study was possible as a resulto the generous nancial support o the Alcoa Foundationthrough the London School o Economics, the University o

Leeds and Business-Community Synergies. We are especiallygrateul to Chevron or supporting this publication. Theauthors remain solely responsible or the content o thisreport, and the views expressed herein do not necessarilyrepresent the views o the organizations they work or.

For correspondence, please contact:

Mr. Jacob Manyindo, Maendeleo ya Jamii,email: [email protected]

Dr. A. Rani Parker, Business-Community Synergies,

email: [email protected]

Dr. James Van Alstine, University o Leeds, email:

[email protected]

Cover photo source: Petroleum Exploration & Production Department,

Ministry o Energy and Mineral Development, Government o Uganda.


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Table o Contents

Executive Summary 2

1. Introduction 5

2. Background 6

3. Methodology 73.1 The CCA Process 83.2 The Questions Asked 93.3 Data Sources 93.4 Limitations 10

4. Community Findings 114.1 Kiryamboga 114.2 Tonya-B 134.3 Kyehoro 144.4 Kakindo 16

5. Company Findings 185.1 Company-Community Interactions 185.2 Benets And Barriers 18

6. Recommendations From CommunitiesAnd Company 206.1 Community Suggestions 206.2 Company Suggestions 21

7. Core Team Analysis 227.1 Community-Company Interactions 227.2 Barriers 237.3 Core Team Recommendations 23

8. Way Forward 25

Appendices 26Appendix One: Interview Protocol 26Appendix Two: List O Stakeholders Interviewed 27Appendix Three: Community Data Summaries 28Appendix Four: Company Data Summary 32Appendix Five: The Research Team 34


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Executive Summary

The recent discovery o commercial quantities o oil and gasresources in the Albertine Basin has raised the possibility oenergy security and development benefts to Uganda. At thesame time, development o this industry also poses important

governance challenges i it is to contribute to sustainabledevelopment and poverty reduction. The rms engaged inexploration and preliminary production have, to varyingdegrees, initiated corporate social responsibility activitieswith local communities. Thereore, the overall aim o thisstudy is to explore community-company engagement withinhost communities in order to maximize the developmentbenets at the local level.1 This study will also contribute tonational and local government eorts to enhance communitybenets rom Ugandas hydrocarbon industry.

In May 2010, a research team consisting o individuals romthe University o Leeds and London School o Economics (LSE)in the UK, Business-Community Synergies (BCS) in the US, theUganda Wildlie Society and the Water Governance Institute(representing the Civil Society Coalition on Oil), conducteda pilot study to assess the relationship between Tullow Oiland communities within and in proximity to the companyscurrent operational area in the Albertine Graben o Uganda.This study, a Community-Company Assessment (CCA),aims to develop shared understanding among companies,communities and government ofcials, so that the extractiono natural resources results in net benets to people livingin and around the areas o exploitation.2

The fndings and recommendations o the study are describedin this report, which is divided into eight chapters. Chapter1 explains the purpose o the study, which is threeold.First, to inorm communities in the Albertine Graben howthey can engage more strategically and eectively with theemerging oil and gas industry. Second, to provide eedbackto companies operating in the region aboutcommunityconcerns. Third, to inorm central and local governmentson the interaction between companies and communities,the emerging issues or consideration, and the managemento community and other stakeholder expectations withrespect to the industry. Chapter 2 provides the necessarybackground to the study. Chapter 3 details the studysmethodology. Chapter 4 presents the study teams ndingsrom the perspective o the various communities visited. Thesecommunities included Kiryamboga, Tonya-B, and Kyehoroin Hoima District and Kakindo in Buliisa District.

Chapter 5 covers the study teams indings rom theperspective o the company, Tullow Oil. Chapter 6 recordsthe recommendations o both the communities and TullowOil on how their relationship can be improved. Chapter 7provides the study teams analysis o the research ndingsand recommendations ater they have been validated by

both the communities and Tullow Oil. The study concludeswith Chapter 8 which oers specic suggestions by thestudy team on how to continue the process o developingshared understanding among corporate, government andcommunity stakeholders in Ugandas hydrocarbon industry.

The research teams recommendations cover six key themes(see Chapter 7 or more detail). Many o these also refectconcerns expressed by both communities and company.

1. Employment. Although signicant employment is notamong the benets that the oil industry is able to oer,existing opportunities may be maximized by increasing the

companys understanding o the local context.

(a) The company can eliminate perceptions odiscrimination in employment by establishing anemployment committee with a two or three yearterm, rather than relying exclusively on companyoremen or Local Council Chairpersons to identiyindividuals or casual labor.

(b) The company and government agencies shouldconduct a socio-economic baseline study in andaround communities it operates so that it maybetter understand and document community

demographics, land ownership, land use practices,power relations, as well as their skills and capacities.

(c) Increase industry investment in training and skillsdevelopment so that uture generations may havegreater employment benets rom the oil industry,or other viable livelihood options.

2. Compensation. Although it is understandable that TullowOil has chosen to ollow national or local compensationstandards, it may be desirable to exceed those standardsand operate on the basis o international best practice.

(a) Consider compensation or displacement andrelocation on the basis o World Bank standards.3

(b) Short-term disruptions to livelihoods requireadequate compensation. For example, those relatedto stopping shing while the company carries outseismic tests in Lake Albert.

(c) Apply World Bank standards to compensate peoplewho are evicted.

(d) District-level government should considereducating communities about the procedures or

compensation.

1 The study is part o a larger research programme based at LSE andUniversity o Leeds which aims to increase understanding about theextractive industries and enhance community capacities to negotiate moreeectively with the extractive industries or sustainable local benets(see: www.lse.ac.uk/communitycapacities). Country case studies include:Uganda (oil and gas), Ghana (oil and gas), Brazil (bauxite), Zambia (cop-per) and Ireland (oil and gas)

2 The CCA is both a methodology and a process, which aims to build

trustul relationships. Shared understanding is achieved when each partyrecognizes the legitimacy o the others perspectives. The CCA wasdeveloped by BCS as a way to strengthen relationships between largecompanies and the communities where they operate. The CCA has beenapplied successully in many extractive industries and contexts around theworld. For more inormation on the CCA, see www.bcsynergies.com

3 For example, see various IFC guidelines, such as: Social Saeguards,updated, orthcoming January 2011; Strategic Community Investment,2010; Stakeholder Engagement, 2007; and Participatory Planning andMonitoring, orthcoming, 2011.


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3. Fear/anxiety about eviction and loss o livelihoods.Community members were genuinely concerned about beingorced to leave their homes on short notice. There was theear o loss o tenure, without adequate compensation,notication and preparation.

(a) Consider sharing inormation on planned oiland gas activities two months in advance so thatcommunities are given time to prepare.

(b) Central government oicials should inormcommunities (at village level) o the boundarieso exploration blocks as soon as they have beendetermined, and about the companies that willbe carrying out exploration activities beore thecompanies arrive in the area.

(c) Government and international donors should investin awareness building about individual and group

rights within the national legal ramework and ininternational law.

(d) Grievance procedures and consultation mechanismsmust be in place or households that do not wish tobe displaced, so that a mutually satisactory solutionmay be ound.

(e) Government and companies should use creativemethods (such as the cartoons developed byNeptune Oil) to inorm communities about activitiesrelated to oil extraction.

4. Community-Company interaction. There wereconficting reports about direct interaction between thecompany and communities, about the process by whichinormation was provided, and complaints that the companystarted operations in communities unannounced.

(a) Companies should identiy and employ communityliaison ocers (who are not elected or ormalleaders) to build and maintain relationships withcommunities, to answer community questions,and to acilitate deeper understanding within thecompany o community interests, concerns andpriorities. Such individuals should visit communities

regularly and document their visits.

(b) Agendas or meetings called or by companiesshould be provided two weeks beore the meetingso that communities can be prepared and participateeectively.

(c) Further research is needed to look more closely atthe timing and the means by which inormation iscurrently disseminated and to seek alternatives.

5. Land acquisition or oil activities. Land speculators areillegally acquiring community land in anticipation o economicgains in uture. In addition, there is no clear policy on howgovernment may acquire land owned communally or oildevelopment.

(a) The government, in consultation with communities,needs to set clear terms upon which communitiescan be displaced in oil development zones.

(b) In areas where land is owned communally, companiesshould lease land or their operations rom thecommunity as opposed to individuals.

(c) Local Councils should work with the District LandBoards to ensure that land disputes in communitiesare resolved beore oil companies begin operations.

6. CSR Projects. Oil company CSR projects are strongly

welcomed and desired by communities. The nature othe projects and how they are implemented is crucial tocommunity-company relations.

(a) Companies should consider community-identiedpriorities in choosing CSR projects. A community-based process is required that would draw romand enable community inputs into the DistrictDevelopment Plan and the Sub-County DevelopmentPlans to ensure that company interventions areconsistent with government plans and local priorities.

(b) CSR projects such as those involving the building o

schools and health centres should ollow nationalstandards.

(c) The company should seek out proessional expertiseand guidance on CSR projects, which are essentiallydevelopment projects, to ensure that they are locally-owned and sustainable with appropriate monitoringand evaluation.

(d) Government and companies need to coordinateand support each other in the planning andimplementation o CSR projects. This will ensure,or example, that there is a smooth transition rom

company construction o a public service acility(health center) and the governments ability tosta, maintain and otherwise sustain that servicewhen the companys obligation is completed. Earlycoordination will ensure sustainability o projectseven when the company concludes its operationsand leaves the area.


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The research team proposes the following way forward:

It is essential that the company conducts a socio-economic/livelihoods baseline study and social impactassessment in the exploration blocks. A methodologyshould be used that is less structured than what

was used or the EIA, explicitly encouraging theidentication o issues and impacts by communitymembers.

Seek additional funding to complete the CCAprocess. This includes holding a multi-stakeholdermeeting, getting stakeholder commitment to ollow-up on recommendations with an action plan, andimplementing at least part o the action plan.

Carry out CCAs in exploitation blocks held by otherlicensed companies ocusing on communities withinand in proximity to the company operation areas.

It might be necessary to take the CCA beyond thetraditional operational area and make the CCA arepeated or regular exercise to continuously inormindustry, government and communities.

Non-Government Organizations and donors couldestablish and maintain a system that monitors andevaluates the implementation o agreed CCA actionplans by companies.

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Seeking Benefits and Avoiding Conflicts from Uganda's Oil resources