Oil deal 'threatens Ugandan biodiversity'

| 9th March 2012
big oil
The village of Sebagoro on Lake Albert, where fishing communities fear oil extraction could destroy their way of life. Photograph: Alice Klein
The discovery of oil in Uganda was a blessing to the impoverished East African country. But before the oil has even started pumping, disputes over tax, accusations of corruption and fears for the environment plague the sector. Alice Klein reports from Hoima

More than two billion barrels worth of crude oil are located under Lake Albert, which sits on the border of Uganda and Congo, and the surrounding forests and waterfalls. The World Bank has excitedly predicted 'black gold' could provide revenues of £1.3 billion per year during peak production thus lifting Uganda's population out of poverty, 40 percent of whom live on less than 80 pence per day.

Oil rights in western Uganda are owned by Anglo-Irish firm Tullow, which recently sold a third each to Total of France and the Chinese state oil company CNOOC in a deal worth £2.9 billion. Controversially, say critics, two rounds of exploration and extraction contracts between Tullow and the Ugandan Government - known as Production Sharing Agreements (PSAs) – have not been made public.

Campaign group Platform leaked the original PSAs in 2010 but the new agreements, hurriedly signed by President Museveni in February 2012, remain confidential. Platform has denounced the lack of environmental protection in the deals, saying the agreements fail to include penalties for pollution that are found in other countries such as fines per barrel of oil spilt, as seen in BP's £27 billion bill for the US Gulf Coast disaster.

But while lawyers wrangle over papers, it is the communities which fish Lake Albert and live along it's shoreline who are most concerned about potential oil spills, which they fear threaten their way of life. 'Tullow has a bad name here in Sebagoro,' says resident Harriet Namono, 28, who sells petroleum, tomatoes and fish on a rickety wooden table outside her hut.

'People came to investigate and do an impact assessment to see how the life of people by the lake is going to be affected by the oil...but they didn't tell us the proper results. Now we don't know what the results are, what the risks are,' she says.

She claims the company's activities stopped people fishing for a month and gas flaring took place closer than the stipulated 100km offshore, causing children to fall ill.

Namono now worries that without more rigorous environmental checks, an oil spill could occur which would devastate their 'motherland' from which 'everyone gets food.'

Tullow says the accusations are unsubstantiated. Jimmy Kiberu, a Tullow spokesperson, says: 'This activity was preceded by a comprehensive Environmental Impact Assessment[...]we are very conscious of our responsibility to ensure we mitigate any possible negative impacts of our operations.'

The impact assessments are carried out by local consultants, potentially susceptible to bribery or bias say campaigners, rather than international consultants brought in from outside. Their reports are then reviewed by the Petroleum Exploration and Production Department, at the Ministry of Energy, and the National Environment Management Authority (NEMA).

But some commentators have questioned the lack of independence in the assessment process. Peter Veit of the Washington-based World Resources Institute says the 'semi-autonomous' NEMA, created by the government to regulate environmental management in Uganda, may be under political pressure when reviewing impact assessments.


Wildlife haven

Veit says, for example, the body has allowed drilling to take place in Murchison Falls National Park, a conservation area that comprises the backbone of Uganda's booming £390 million tourism industry. The park, where the Nile winds its way through ancient forest before crashing through the falls and into Lake Albert, attracts hundreds of thousands of visitors every year. Alongside the waterfall, many hope to catch a glimpse of the elephants, hippos, giraffes, buffalo, chimpanzees, crocodile and more than 360 bird species inhabiting the 5,000 square kilometre forest.

Alongside its wildlife content, the UN says it provides an important species corridor that warrants protection. Subsequently, many fear disturbance from the oil industry could drive away animals and their visitors, leaving Uganda's vital tourism economy in tatters.

Grace Aulo, the tourism development commissioner, says drilling is phased to prevent disturbance to the animals and associated tourists. 'Of course you cant deny that there are impacts, the impacts are there but we're trying as much as possible to minimise them. There's light and heat but we make sure drilling is buried and the landscape is maintained so that not much impact is felt,' she said.

But Taimour Lay, former researcher with Platform, says the oil contracts and unfinalised national oil bill deter the government from adding environmental provisions, should they become necessary to protect Murchison Falls in the future.

'Leaks of the renegotiated PSA just signed by Tullow show a slight improvement because the clause has been narrowed. But the oil bill before Parliament is still an inadequate framework for holding the companies to account and contains provision for only very low fines,' he says.

Though Tullow insists the contracts contain strict provisions around environmental management, without legally binding protections and given the track record of oil companies in Africa, many fear Uganda risks falling victim to the same environmental destruction that has plagued nearby nations such as Nigeria.

The Government is confident Uganda will not make the same mistakes and insists it is taking the environment seriously. Energy minister Irene Muloni says: 'We have already begun close monitoring of environment and biodiversity and we have a multi-sectoral team set up to look at these issues.'

She says all companies are legally-bound to follow the guidelines issued by NEMA, including that which will construct a proposed pipeline to run the oil from Lake Albert to Africa's east coast for export. Rumours are rife it will travel through Kenya and surface in Mombasa or a proposed new port at Lamu, a previously picturesque tourism destination until westerners were kidnapped there in 2011, sparking Kenya's invasion of Somalia.

Some oil will remain in Uganda and preparations for a £3 billion refinery have begun in Hoima district. The construction will displace 30,000 people which the government has promised to relocate and compensate through a 'Resettlement Action Plan'. But Hoima's population, who are mostly subsistence farmers, are worried for their future.

'We have heard that when there is oil it affects the environment and climate and here, our main activity is farming. We are fearing because we're going to lose our farmland because it will be destroyed,' says Kakura Ouada, 47, chairman of Nyahaira, a village located on the refinery site.

Ouada says he is confused about the relocation process after he was visited by three different people, all claiming to be government officials. 'At first people came to demarcate the boundaries of the refinery, that is a piece of land equivalent to, I think, 500 acres. But then, some other people came who said they were from the government and the area they identified goes beyond that, so people are worried,' he says.

Hoima's District Councillor, Vincent Opio, says many uneducated residents are purposely targeted by ruthless Kampala-based businessmen attempting to acquire land in the area. Land in the proposed refinery area has increased from approximately £21 (80,000 Ugandan shillings or UGX) per acre to more than £1,315 (5 million UGX) in just three years. The land shortage, he says, is due to land grabs, where land is bought by foreign corporations and used for biofuels or food for export.

Hoima's subsistence farmers fear that to make way for the refinery, which will include an airfield to transport oil industry staff and officials, they will be moved to small plots leaving them unable to rotate crops of cassava, cabbage, maize and beans, which they depend on for survival.

'I'm not happy about leaving my land when I was born here, leaving my crops and going where I don't know – it's giving me sleepless nights,' says Upenji Seletino, a Nyahaira subsistence farmer aged 73. 'What will we get if we leave our plantations here? This is our only livelihood.'


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