Globally, oil and gas activities are known for its degrading and destructive effect on the environment. In Uganda, there are already fears that oil and gas activities in the Albertine graben could destroy the fragile ecosystem. This calls for increased close monitoring and early mitigation measures to be put in place.
District leaders from the oil rich Albertine graben want government to establish a special fund dedicated to helping district environment officers to routinely monitor the impact of oil and gas activities on the environment and undertake early mitigation measures.
Bulisa district chairman Mr Agaba Simon Kinene said, “As a district, we are implementing oil and gas industry at zero budget, yet we are decentralized,” he said.
The oil production phase, is expected to generate a lot of hazardous or non- hazardous waste. Therefore, district environment officers are expected to take a center in ensuring that all the oil waste generated and pollution are properly managed.
As Uganda prepares to started oil production, a lot o is preparing for District Environment Officers (DEOs), have often complained of lack of facilitation to monitor oil and gas activities.
Mr Philip Ngongaha, the District Environment Officer, Bulisa was bolder and called for the establishment of a fund to help them monitor oil and gas activities. He said currently, district environment officers lack facilitation to do their work. “We need a special fund to facilitate oil and gas monitoring,” Ngongaha argues.
He argued that the fund would help the environment officers acquire modern equipment for monitoring. “You cannot expect an environment officer to monitor noise pollution using naked eyes. We require modern equipment,” he said.
The leaders were speaking at an oil and gas conference organized by Advocates Coalition for Development and Environment (ACODE) at Imperial Royale Hotel in Kampala last month.
He argues that given the environmental concerns that are expected to come with the petroleum sector, it is important to allocate enough resources to monitor any changes in the environment and make early mitigation measures. “Local environment committees provided for under in the law but are not in existence,” he said.
“I wish to concur, we need a special fund for environmental officers, to monitor these activities otherwise, we shall keep taking when the environment is being depleted” Paul Mulindwa, the Program Coordinator, Kibaale District Civil Society Organizations Network said.
Presenting a paper on the impact of oil and gas on local government, Nwoya District Chairman Mr Patrick Okello Oryema wondered how district environment officers monitor oil and gas activities without being facilitated to do their work.
However Ms Aijuka Sarah, the Environmental Monitoring Officer in charge of Oil and Gas at the National Environment Management Authority (NEMA) explained that the authority is already drafting the National Oil Spill Management Regulations and contingent plan.
“We already have oil waste, but we are still lacking regulations on how to handle the oil waste,” Ms Aijuka explained. Aijuka said the environmental watchdog operates on an assumption the district environment officers have money for environmental activities, an assumption that she said won’t be held anymore but rather consider the lack of finances and see how best to have the people facilitated.
The muddled procurement of the lead developer for the oil refinery could have played a role
President Yoweri Museveni on Wednesday, in a surprise twist of events, fired the Permanent Secretary, Ministry of Energy and Mineral Development, Dr Stephen Isabalija. Though the President did not give reasons for the surprise sucking, analysts within the Ministry of Energy and Mineral Development argue that the messy handling of the procurement process for the oil refinery lead developer could have played a hand in Isabalija’s sacking.
Mr Isabalija was only 10 months old into the job, after replacing the long serving Fred Kabagambe Kaliisa during a reshuffle of Permanent Secretaries in November last year. Kabagambe Kaliisa is now a Senior Presidential Advisor on Oil and Gas.
The President appointed Robert Kasande, the acting director, Petroleum Directorate in the Ministry of Energy and Mineral Development, as the acting Permanent Secretary. Mr Kasende, a geologist by profession, was also the project manager for the oil refinery project.
Isabalija’s sacking that started as a rumor on Wednesday, was later on Thursday confirmed by the Executive Director, Uganda Media Center and government spokesman Ofwono Opondo who twitted, “Dr Stephen Isabalija’s contract has been terminated and he is to be paid one month in lieu of notice,” Opondo said.
He said the President did not give any reason for the terminating Isabalija’s contract. During his short stint at the Ministry, Isabalija’s oversaw the eviction of over 60,000 artisanal gold miners in Kitumbi Sub county, Mubende district. Government claims that the artisanal gold miners were illegally mining gold and want an “investor” to take over.
MESSY OIL REFINERY PROCUREMENT
Dr Isabalija an academic and former Vice Chancellor, Victoria University, could have burnt his fingers in the procurement process of the lead developer for the oil refinery.
Early this month, Dr Isabalija announced Albertine Graben Refinery Consortium (AGRC), a consortium of American and Italian companies, as the winner for the oil refinery deal. This edged out a Chinese Consortium led by Guangzhou Dong Song Energy Group Limited, that accused the selection panel of corruption.
Guangzhou Dong Song Energy Group Limited, was granted a mining lease to develop the Tororo Phosphates.
The Chinese consortium includes; Guangzhou Dong Song Energy Group Limited, Guangdong Silk Road Fund, China Africa Fund for International Corporation, China Petroleum Engineering and Construction Corporation (CPNC) and the East Design Institute.
After being edged out in the $ 4bn dollars refinery deal, the Chinese penned a letter dated 8, August, 2017, to the Minister of Energy and Mineral Development, Irene Muloni copied to the Prime Minister in which the consortium expressed shock at the announcement.
“We are taken aback by press reports indicating that the government of Uganda has reportedly selected a group known as Albertine Graben Refinery Consortium to develop the refinery project. Incidentally, the same press reports indicate that the Dong Song – CPECC consortium had been appraised as the best bidder with 83.38 percent,” reads the letter signed by LV Weidong, on behalf of Dong Song led consortium.
It added, “The purpose of this letter is to inform you that the Dong Song – CPECC consortium has never disintegrated. It remains strong and committed to invest in the development of Uganda Refinery project provided the concerns raised in the consortium’s earlier letters are addressed. The letter reads.
The consortium even threatened to challenge the procurement process that led to the selection of any other consortium in courts of law. They also complained that the only reason, they were denied a deal is because, the consortium members are close to President Yoweri Museveni.
“Dong Song is suffering because it is close to the President. There is no way it can give money to people involved in the selection process,” an official is reported to have said. This year, two officials from the Ministry of Finance tried to solicit for money from Guangzhou Dong Song Energy Group Limited, the president laid them a trap and they were arrested.
The Chinese also alleged corruption in the way the deal was awarded. “So, we were edged out, because they know we can’t give them money,” an official of the consortium is reported in the local press to have complained.
One of the Consortium members, CPECC, a subsidiary of CNPC has demonstrated capacity having built refineries in South Sudan, Algeria, Chad and Niger. However, selection committee is reported to have edged out Dong Song consortium because they didn’t provide their intended financiers.
The Chinese are also known of using powerfully connected individuals some of them members of the first family to broker their deals. Guangzhou Dong Song Energy Group Limited, used the President to get the Tororo Phosphates Deal. It is this politics of balancing interests, that could have landed Isabalija in trouble and could have had played a role in sacking.
Kawunde Patrick has been in the gold mining business for three years now. Previously he was a timber dealer and before that he traded in South Sudan until unrest broke out. On the fateful morning of the Mubende mines eviction, he watched in horror as his livelihood was swept right from under his feet.
The 35-year old father of five had a pit in the mines. On that fateful morning his boys were already in the pit working when he was ordered by angry soldiers to get them out and ensure no one stayed down. The miners had been given two hours – though most swear it was hardly an hour – to vacate the mines. Pandemonium reigned as over 50,000 people gathered whatever they could to flee.
Preoccupied with getting his boys out of the pit Kawunde had no time to pick anything from his house. By the time he got there the padlock was broken, his house ransacked.
“Soldiers stopped me from taking anything. I lost three generators; three blowers that supply oxygen down the pit and four drilling machines,” Kawunde painfully narrated his ordeal.
He valued the generators at Shs3million each; two blowers at Shs2.2million each and a smaller one at Shs700,000. The drillers together cost Shs4.4million.
“I watched as Sh16million of my capital was snatched out of my hands,” he said resignedly with tears welling up in his eyes. A week later he found out his Sh9million ball mill had been taken too.
“In my lifetime I have never seen anything like this,” he said in a distant voice.”
Mr Kawunde is just one of many artisanal miners that lost property and money during the eviction.
“People left money in their houses as they fled,” said another miner who identified himself as just Alex. Alex was one of so many business people who fled off the gold value chain. He owned a lodge and bar. He had just spent Shs6million on iron sheets to construct more makeshift rooms. Like many others he left his iron sheets in the mines.
“If I had not bought those sheets I would at least have something to start with. I left everything of mine in the mines. I have not changed clothes since we were evicted,” he said.
Another miner of Rwandese origin had his Toyota Premio confiscated by police when he was asked to produce his national ID which he had misplaced in the fracas.
Led by Ntare Sipriano, the LCI chairman Lujinji B, an angry group of miners still camped in the trading center just outside the mines said the military men told them they had orders to take over the place and confiscate everything.
“A few lucky ones had managed to get out some property before the place was put on lockdown,” said one of them.
To the ordinary eye artisanal gold miners spend day in and out torturously excavating stone and go through strenuous means to extract gold from the ore. Yet in fact the clueless miners are counting losses since their eviction early this month. Clueless because every government stakeholder they believed had given them assurance of their continued operations right from the fountain of honour has betrayed them.
Mr Bukenya Michael, the Bukuya constituency MP, said they had ‘done everything possible’ to stop the evictions, lobbying in higher offices but were powerless to stop anything.
In his State of the Nation address of 2015 President Museveni assured the miners in Mubende their plight would be addressed. For five years now the miners have waited for a location license in vein. This year, with the eviction looming, negotiations were ongoing as politicians shuffled between State House and Mubende.
Mr Emmanuel Kibirige, the secretary Singo Artisanal and Small Scale Miners Association said Benny Namugwanya, the Woman MP Mubende, was supposed to have given them feedback from a consultation meeting she had attended in Kampala over their plight. Other than what had transpired they were expressly evicted albeit earlier directives to vacate that they mostly took casually.
“We have lost our lives and livelihood. Our government has done it again to further marginalize the poor. Thanks NRM. Our property worth millions is in the hands of soldiers. Only two hours to shit items after working for ten years,” Kibirige says bitterly.
Kibirige wondered what would become of people’s property as there wasn’t any sort of documentation taking place.
“I have an acre of land I bought in that place and have a land sale agreement for it. What has it got to do with the mines? We would not have refused to leave the mines but should have let us take our property,” Kibirige, who sustained a broken leg in the fracas, says.
After years of toiling several of the miners own pits. Inclusive of paying rental fees to landlords, hiring generators and drilling tools, and labour, operating a pit cost up to Sh500,000 daily, according to Ivan Kawuma, another miner. Kawuma owned a pit more than 300 feet deep after working for more than five years.
What has however left several people baffled is their machinery that they were using in their operations. People were not allowed to take their machinery. Miners have also reported seeing a military police truck driving out of the miners with generators, blowers, and other equipment like drillers.
When asked about people losing property Mr Byaruhanga Patrick, the district police commander Mubende, said those were exhibits to adduce as evidence of illegal mining otherwise people had managed to carry out all their other belongings.
For now the miners are waiting and hoping that they will be allowed back to operate or at least seize opportunities if an investor starts operations.
By Robert Mwesigye and photos by Josephine Nabaale
Over 50,000 artisanal miners operating in Mubende district were ordered to vacate the gold miners within a period of two hours on Friday 04/08/2017.
This operation to evict all the artisanal gold miners in Mubende district is was led by Col Balikuddembe Lutaaya commander 1st division in Uganda People’s Defence forces.
The miners were told to leave the mining sites in Kitumbi and Bukuya sub counties but were not given ample time to rescue their mining equipment.
A troop of Uganda peoples defence forces and Uganda police forces totaling 750 people, 4 tear gas vehicles and tanks were stationed in the gold mining sites in Kitumbi and Bukuya sub counties forcing the gold miners and other people operating business with this location to pack their belongings to leave the mines.
Mr Sempowo Robert the chairman Mubende artisanal miners explained that they has been woken up by the sound of lorries moving into the mines that were packed with Uganda peoples defence forces soldiers and Uganda police forces officers who ordered them to vacate the premises within two hours and by midday no single person was to be found in the mines.
Sempowo added, “Currently most of the miners in this area are packing up their belonging to leave the premises ,others have abandoned their property for lack of money especially the heavy machinery while other are selling the property at a giveaway price so that they can live this place before it’s too late.”
“Government is not fair, because there was no official communication to neither the leaders or to the gold miner to vacte the gold mines , we have been relying on rumours and hear say, its a shock to us all our efforts have been shattered one investor. ”Sempowo expressed.
Ivan Male Kawuma, the Project Coordinator Singo Artisanal Small Scale Miners Association said that “we are being treated like non Ugandans, how can we become like refugees in our own country. There is no communication, no compensation for the money invested in our business running in the gold mines. This has been our main source of livelihood and we don’t know what we are going to do next.”
His Excellency Yoweri Kaguta Museveni the president of Uganda in his letter addressed to the hon. members of parliament Mubende district dated 28/June/2017 made it clear that;” those artisanal miners who invaded where the investor had excavations must straight away get out.
The evictions folowed the presidential directive to evict all the artisanal miners in Mubende district on grounds that the people in the mines are not registered, government doesn’t know the amount of gold they are getting out from this area, the people operating in this area are not Ugandans and increased environmental degradation which is a threat to the nearby communities.
However the permanent secretary under ministry of energy and mineral development Dr.Stephen. R. Sabalija in the letter dated 02/08/2017 entitled Statement on illegal mining activities in Uganda explains that government is putting in place intervention measures whereby all the local artisans will be registered in all mining areas of Kitumbi and Bukuya sub counties so that they can be organized into groups that shall ultimately be regulated.
This intervention is anticipated to take 3 months and will subsequently help the ministry of Energy and Mineral development to re-organise mining activities supported by Uganda police force, Uganda people’s defence forces, Directorate of citizenship and immigration control under the Ministry of Internal Affairs and will be led by Ministry of Energy and Mineral Development.
On 21st June, the three prime ministers from Ker Kwaro Acholi, Alur Kingdom and Bunyoro Kitara Kingdom launched Guidelines to equip cultural leaders in their institutions in managing their relationship with the oil and gas companies as productively as possible.
The guidelines reflect the three cultural institutions’ determination to play an active role in preserving tangible and intangible cultural heritage, in ensuring sustainable development and in fostering peace amongst communities.
Oil in Uganda’s Robert Mwesigye talked to the Executive Director Cross Cultural Foundation Uganda, Emily Drani, on the milestone the Foundation has made and their expectations following the landmark event of the launch of the guidelines by cultural institutions for oil and gas companies operating in Uganda’s Albertine region.
What have been your major achievements 10 years down the road?
Our achievements over the ten years especially with regards to what we are doing right now is that we have come to understand the relevance and role of cultural institutions; we have taken into account some of their strengths but as well as their weaknesses as we have worked with them especially those willing to address those weaknesses through capacity building, documenting and reflection events. We have documented statements that they have made linked to the citizens manifesto.
In that statement they have highlighted their responsibility but also the demands they are making from the Uganda government and development partners. But they have also made commitments in respect to what role they play today. Of course the role of cultural leaders has evolved today. What they did 50 years ago is not what they are doing today. And one of their roles is protection of the natural resources. There are about twenty two points and this is just one of the points where they said we have a role to protect the environment because of its cultural significance, not its economic value. And so the question is what shows and how can you guide other cultural leaders who have just become leaders today about that responsibility. So today is actually about the responsibility they have taken because we’ve worked with many cultural leaders across the country and they might have responsibility but it’s not documented. It sounds very general and something that is very hypothetical so this is a practical way that they have committed on paper that they are responsible for a number of issues that they are going to take on that responsibility.
Uganda right now is abuzz with extractives development for which cultural institutions have been advocating to have major participation. Do you feel government is responding or is there need to do more?
I think there is much more that needs to be done to harness the influence and authority that cultural institutions have. There has been often a thin line between their authority as institutions and then their political authority. And therefore they have always been treading very carefully. So when it’s a purely development agenda they are very outgoing and very forward. But when there’s a very thin line as to whether they’re now overstepping that line you find they’re not very assertive. So much as the laws of energy and use of natural resources have been taking place they have not asserted themselves to say yes, we are key actors in all this and we need to be consulted and we need government to recognize that the resources were talking about also have cultural significance and that’s where we come in, because in the past of course they were managing those resources for economic benefit and now they are told that is something beyond their mandate; they are supposed to focus on culture. But even then they can still make a case for land; they can still make a case for natural resources where there’s traditional medicine, there’re secret sites which fall directly under their mandate but they’re not very forthcoming. Government has taken advantage of that and actually not consulted them; but also for government to consult you need to demand and be acknowledged that this is a place where you can make a contribution.
How would you rate the level of responsiveness by oil exploration companies to the call to conserve cultural sites/ heritage while carrying out their activities?
I think there are a couple that have been quite forthcoming because I know Bunyoro kingdom received funding from think Tullow ( Tullow funded Bunyoro Kingdom to the tune of 1000USD to facilitate construction of a museum that never was. This was meant to enhance the protection of cultural Heritage visa viz oil and gas operations ). They gave them a significant amount of money to build a cultural centre and that was without too much lobbying. They felt that was there corporate social responsibility. But I’m not sure about the others. I have not heard because we’ve done some reviews on the relationship between cultural institutions and these oil companies where they have just gone out of their way to (i) recognize culture matters (ii) to give some incentives to the communities to preserve their culture but (iii) also to find out if they can be guided where there’s a space of cultural significance and if there is any way they can avoid that. That on record has not been very strong. You might want to dig deeper on how a number of sites have been desecrated.
The cultural institutions are more concerned about oil & gas; have they considered other extractives? Because we’ve been to Moroto, the situation there is not so rosy.
No. I think the oil has brought to the fore that there’s significant benefit that can accrue to the community. But in other areas; for instance, there’s marble in Moroto but the council of elders there is very small. We know there’s salt extraction, there are different minerals being extracted from different places. I think some of the cultural institutions think that is a government preserve. And especially where there is a bit of contention over ownership as you have seen Bunyoro clashing over the forest with the National Forest Authority. So that I think has made a number of them not to be very forceful in their demand not only to be consulted but to benefit.
The level of awareness and agitation for inclusivity in the extractives sector in Uganda by cultural institutions is quite prominent in the Bunyoro region. Do you feel that resonates elsewhere in mineral host communities?
For us as an organisation usually respond to need. Of course we have different communities where there are different resources; it could be a forest; it could be a natural resource of another nature, mineral or something. But if the cultural institution itself has not seen that need, we are not going to go there and say you need a role in this. They need to say traditionally we have been responsible and now we’re being left out. Then we can partner because they have their traditional mandate but it’s not our job to go and start instigating that responsibility and interest.
An MP at a workshop said there was a resurgence of ethno-nationalism where cultural institutions are agitating for priority in sharing on what is a national resource. What is your view?
Well CCFU tries to learn from other countries. And learning from other countries we actually invited cultural leaders from Ghana where there is gold. And in Ghana fortunately for them the government recognizes cultural institutions. They are actually part of the legislation. But they have royalties there and I think that helps to diffuse some of the conflicts that you might have with the government and I think they do have a case because the land is part of what you should call Bunyoro Kingdom. So we don’t see any problem with Bunyoro kingdom demanding to have a percentage of the royalties. It’s maybe what it’s going to be used for or whether the community is going to benefit. That’s a question to be answered. But the principle that they should receive royalties is a valid one. Absolutely!
Going forward after today’s dialogue what are your expectations?
What we are hoping to see is that some of the three cultural institutions that are here pick up on some of the guidelines and operationalise them. It’s difficult for them because they always have challenges with resources but they are things that can be done practically without finances. And they can have negotiation with oil companies and say this is what our desire is and it’s standard now which has been set so we expect them to use it and for those who have not had an opportunity to develop guidelines we hope they’ll be able to borrow some of the principles in there. When they are dealing with investors, people in the extractives industry they’ll say yes, please could you adhere to some of these principles because it’s about the preservation of our heritage.
“We are in shock that the President can approve the eviction without him coming down to hear our side of the story” says Mr Ivan Kauma Male, a project coordinator of the Singo Artisanal and Small scale miners Association (SASMA).
Mr Male, a Makerere University graduate in Electrical Engineering says it is unfair for government to evict thousands of artisanal miners who are gainfully employed and who are contributing to national development.
“This demonstrates that government has no will to support people who are struggling to earn a living in such an industry” says Male, who claims to have invested over Shs370 million in the mines in the past three years.
The artisanal miners have asked Government to atleast give them a grace period of up to one year before evicting them.
In a letter dated June 28th 2017 addressed to Members of Parliament from Mubende district, President Museveni directed that those who invaded where the investor had made excavations must straight away get out.
“The investor is there to help us to know whether there is gold and, if so, how much of it. Why should anybody interfere with this?” President Museveni wrote to law makers from the gold-rich district.
Oil in Uganda has confirmed that there have been back and forth negotiations between the artisanal miners, local leaders, investors and key officials from the central Government.
The Mubende district Woman Member of parliament Benny Bugembe Namugwanya confirmed that area MPs authored a petition to the President on June 16th 2017.
The petition requested the President to give artisanal miners more time before being evicted. The leaders also want government to grant location licenses to the artisanal miners who reportedly applied for them early last year in the Directorate of Geological Survey and Mines.
“I agree to give ample time to the artisans in Mubende. That is no problem. The bigger issue is to keep in mind what we talked about in the meeting” the President said.
The President compared the minerals to a family banana plantation where by children of the family or any other family members do not cut immature bananas. Even where the bananas mature, it is the head of the family in this case Government, to determine how much bunches should be cut by whom and when.
“The ample time we talked about should be in portions that are away from where the investor had gone to work” Museveni said in a one-page letter which oil in Uganda has seen.
The Present’s letter is copied to the Vice President Edward Kiwanuka Ssekandi, the Prime Minister Dr Ruhakana Rugunda, the Inspector General of Police (IGP) Gen Kale Kayihura, the Chief of Defence Forces Gen David Muhoozi, the Defence and Veteran affairs minister Adolf Mwesige and Irene Muloni, the Energy and Mineral Development Minister.
However the Bukuya County Member of parliament Dr Michael Bukenya claimed that the Presidential directive seems to be contrary to the President’s stand on artisanal miners which he stated in the 2016 presidential campaigns and the 2017 state of the nation address.
“The president acknowledged artisanal miners and promised that Government would grant them licenses”, says Mr Bukenya who represents the gold-rich constituency in Uganda’s tenth parliament.
“Instead of Government making steps to regularize the artisanal miners by granting them location licensees”, Bukenya adds, “artisanal miners are being threatened with eviction.”
He says artisanal mining in his constituency has stimulated economic growth, increased the local purchasing power, prevented rural-urban migration and created employment for thousands of people.
According to Dr Bukenya, local leaders are seeking audience with the Chief of Defence Forces, the Permanent secretary in the Ministry of Energy and Mineral Development and the President to explain the need to stay the eviction.
Chamber of Mines and Petroleum get new leaders
Dr Josephine Wapakabulo, CEO, UNOC joins the Chamber as special advisor, Elly Karuhanga retains his seat as chairman
The Uganda Chamber of Mines and Petroleum (UCMP) has elected new board members. In the election last week, UCMP members re-elected Dr Elly Karuhanga as the board chairman. Karuhanga is the founding the founding chairman for the Chamber.
In a new twist, Stanbic Bank, Managing Director, Patrick Mweheire takes over from Richard Kaijuka as the Chamber’s new vice chairman. Kaijuka has been the founding vice chairman for the Chamber. Sam Thakkar from UHY Thakkar & Associates, replaces Paul Sherwen, as the General Secretary, Jeff Baitwa, the Managing Director, Threeways Shipping continues as the treasurer.
Launched in 2010, UCMP is a not-for-profit that represents the interests of private players in minerals and petroleum sectors that lobbies government to provide a conducive environment for investing in the extractive sector. It is credited for having pioneered the annual Mineral Wealth Conference and the Oil and Gas Convention that brings key players together to shape the discuss issues that affect the minerals and oil and has gas sectors.
Other members of the influential nine-member board, include; Adewale Fayemi (General Manager, Total E&P BV), Xiao Zong Wei (CNOOC Uganda Limited), Daniel Peterson (Managing Director, Hima Cement), Nicholas Ecimu (Partner, Sebalu and Lule Advocates) and Abdul Kibuuka (Corporate Affairs Manager, Tullow Uganda Limited).
The Council’s Advisory Committee has also changed, with more positions created. The committee has Oliver Lalani from Roofings Group (Minerals), Tony Otoa from TOTAL E&P (Oil & Gas), Patricia Ojangole from the Uganda Development Bank (Finance), Allan Mugisha from Ernst & Young (Tax & Investment), Pamela Natamba from PWC (Local Content), Miriam Magala from the Uganda Insurers Association (Insurance), Gerald Mukyenga from Multilines International (Health, Safety & Environment) and Carol Athiyo from AON Risk Solutions (Public Relations).
Others are Joshua Ogwal, a Partner, Ligomarc Advocates, (Legal & Advisory), Natasha Venus from Sipa Exploration (Human Resources), Dilip Bhandari from Spedag Interfreight (Logistics), Peter Bitarakwate from ZAKHEM (Special Advisor to the Chairman), Dr. Josephine Wapakabulo, Chief Executive Officer, Uganda National Oil Company (Special Advisor) and Aggrey Ashaba from GCC Services (International Relations).
The advisory committee aids the Chamber council. The council’s primary role on the other hand is to help the recently created Board of Trustees (BOT) to oversee the general management and operation of the Chamber.
However, Kaijuka bowed as the vice chairman of the Board of Directors of the UCMP to head the newly establish Board of Trustees. Kaijuka will be deputized on the board of Trustees by Jimmy Mugerwa (General Manager, Tullow Uganda Limited), while Gen Salim Saleh’s sister in-law, Kellen Kayonga is the new treasurer board of trustees. Kayonga is the boss of Asker Security, a private security firm and a dealer in the minerals sector.
Other members of the board of trustees include; Mr Paul Sherwen (General Secretary) and Gordon Sentiba, (Astor Finance Plc) as a member.
The Board of Trustees (BOT) was one of the new additions in the amended UCMP constitution, last year, and will be charged with providing overall governance to the UCMP besides acting as the custodian of the Chamber’s assets and resources.
Dr Karuhanga hailed the new developments as heralding a new chapter in the UCMP’s journey. “The Chamber has continued to evolve to respond to the changing landscape in the petroleum and mining sectors in Uganda. With a good blend of youth and senior citizens, we are positive that the new leadership is well structured to revitalize our focus and direction as the country eyes First Oil in 2020,” he said.
“At the top of our agenda, will be advocating for the creation of a ‘Dream Team’ compromised of government officials and us in the private sector that will make sure our local content aspirations are met through skilling as many Ugandans as possible in all relevant and practical areas while ensuring all timelines are adhered to, to beat the 2020 target.” Dr Karuhanga added.
Karuhanga reiterated UCMP’s appeal for more transparency in the minerals sector, Svalue addition using the latest technologies.
By Our Hoima Correspondent and Edward Ssekika
President’s envoy disappoints Mubende gold miners, fails to turn up for the long awaited reconciliatory meeting
Thousands of artisanal miners that had gathered at lujinji mining site in Mubende district to meet the presidential advisor on land matters left the venue disappointed over her failure to show up.
According to Mr Sempowo Robert chairman Mubende artisanal miners, they secured this appointment with Ms Kiconco flora, the legal presidential advisor of land so that they could be able to show her the area currently occupied by the artisanal miners, how miners operate in this area, equipments being used by miners, how many miners are operating in this area, to win her support towards an end to a possible eviction of the miners by the President.
Earlier in the same month July, the President of Uganda Yoweri Museveni allegedly issued a presidential directive to have over 500 artisan gold miners displaced from the mining area of mubende in favour of Gemstones International mining company. This company holds the location license for the area, but had allowed the artisan miners to operate alongside them in this same area, from which they derive a livelihood. This however has since changed. Worried that the miners may encroach on all the gold, they reportedly sought government’s protection to retain back all their land for which they hold a license. Government officials, majority from the Ministry of Energy advised the president accordingly, who in turn ordered for their vacating.
These miners that gathered up from 7:30am in the morning on Thursday 13th April, left three hours into waiting disappointed after an official communication that the presidential advisor was not to turn up, because she was caught up with state work therefore postponing the meeting to 20/July/2017.
Mr Lukwago Peter one of the miners expressed disappointment: “We have been forced to suspend our work because we are law abiding citizens that need to stream line the course of our work. We really need government to listen to our side of the story other than favouring one investor, a move that has left us jobless.”
Lukwago added that the news about the presidential directive of eviction left them in fear.
“Few people go into the pits in search for gold. Few people are buying new stuff for their shops. Business is no longer booming because we can’t invest much capital for fear of being chased away from the mines,” he said.
Mr Senkusu Edward, the community development officer Kitumbi sub county explained that;” we have received a communication from the presidential advisor that she won’t be able to appear for the meeting because she is caught up with other state matters therefore postponing the meeting to 20/July/2017.”
The presence of potential gold deposits in Kasanda Sub County in Mubende district was first discovered by the British colonial government in the 1920s. Then, in the late 1990s, regular visits by potential investors with big plans alerted locals to the existence of a valuable mineral in their midst, and soon Ugandans from other parts of the country were flocking the area to start small-scale operations as illegal miners. Many people who were previously unemployed or underemployed from the streets of Kampala and from as far Democratic Republic of Congo and Republic of Rwanda have continued to come into this area. This has led to an impromptu gold rush with miners, washers, middlemen, buyers and exporters.
The area houses men, children and women who utterly derive their livelihood from artisan gold mining. These insist that they applied for a location license two years ago, when they learnt of the expiry of Gemstone’s first license. They however did not receive it, but Gemstone did again.
The Petroleum Fund currently has $ 72 million dollars and Shs 10bn on its Shillings account instead of the $709 that was collected
At least Shs 2 trillion oil revenues has already been spent on infrastructure and other energy projects, a report of the Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) reveals. However, the report adopted by parliament last week, does not give details of how and where the money was spent, but the Secretary to the Treasury in a letter, states the money was spent on the construction of Karuma hydro power plant.
One of the terms of reference for the Committee was to establish all revenues received in the Petroleum Fund. Accordingly, during the investigations, the Committee requested the Office of the Auditor General (AOG) to conduct a special audit to establish all revenues received by government in respect of the Petroleum Fund. After the audit, the report notes, it was discovered that so far, government received $709 million dollars in petroleum revenues between 2011 – March, 2017.
“The Committee established that a sum of $709 million dollars which has been ring fenced for infrastructure and energy development, accrued to the sector since petroleum activities started,” the report reads in part. However, as at 14th March, 2017, the Petroleum Fund had only $ 72.5 million dollars on its dollar account and a paltry Shs 10bn on its Shillings account.
“Out of this, $633.7 million dollars (approximately Shs 2.2 trillion) was transferred to the Consolidated Fund [and spent on Karuma hydro power project] while the sum of $72.3 million dollars is being held in dollar account and Shs 10bn Shillings account in the Petroleum Fund.
The Committee report reveals that by the time the Public Finance Management Act came into force in February, 2015, the oil revenue account in Bank of Uganda had a total of Shs 1.36 trillion, which was transferred to the consolidated fund.
In the report, MPs question, why Shs 1.36 trillion was transferred from the Oil Revenues Account in Bank of Uganda to the Consolidated Fund, instead of transferring it to the Petroleum Fund as required by the Public Finance and Accountability Act, 2015, as the fund’s opening balance.
However, in a letter dated June, 24th, 2015, jointly signed by Mr Keith Muhakanizi the Secretary to the Treasury and Mr Lawrence Ssemakula the Accountant General, and seen by our writer, the duo directed the director in charge of Banking at Bank of Uganda to transfer the money, close the account and open a new account in the name of the Uganda Petroleum Fund.
“Prior to the enactment of the PFMA [Public Finance Management Act, 2015], the oil funds on account were earmarked to support the financial year 2014/2015 budget for Karuma hydro power plant, and were released from the consolidated fund and thus need to be refunded to the Uganda Consolidated Fund (UCF),” the duo wrote and further explained, “In order to operationalize the Petroleum Fund, there is need to open bank accounts for the Fund, where all oil revenues received by government from 6th March, 2015 shall be deposited. I authorize you to open a Uganda Shillings (UGX) and dollar (USD) accounts in the name of Uganda Petroleum Fund.”
According to the letter, the principal signatories to the Petroleum Fund are; Mr Keith Muhakanizi, Mr Patrick Ocailap (deputy Secretary to the Treasury), and Mr Lawrence Ssemakula, the Accountant General.
“The Committee recommends close monitoring and supervision of the activities of the petroleum authority and the Uganda National Oil company Limited. The relevant committees of parliament should receive quarterly reports from the Authority and National Oil Company,” the report recommends.
In January, 2017, the Committee chaired by Hon. Abdul Katuntu (Bugweri MP) was tasked to investigate the controversial Shs 6bn reward to 42 government officials for winning a tax dispute between government of Uganda and Heritage Oil and Gas Limited an arbitration tribunal in Landon in 2015.
The gist of the investigation was to establish the legality of the Shs 6bn rewarded to 42 government officials for their effort in winning a tax arbitration case between government of Uganda and Heritage Oil and Gas Limited in Landon.
In 2010, Heritage Oil and Gas Company Limited sold its participating stake in the Albertine Graben to Tullow Uganda Limited at $ 1.45 billion – a transaction that attracted Capital Gains Tax. However, Heritage objected to tax assessments in the Tax Appeal Tribunal and also initiated arbitration proceedings in Landon against government of Uganda under the United Nations Commission for International Trade Law Arbitration Rules, 1976. The company sought a refund of all monies collected as Capital Gains Tax.
In February 2015, the tribunal dismissed Heritage’s application and awarded government of Uganda $ 4 million dollars in costs incurred in defending the application. The committee established that government hired Curtis Mallet – Provost, Colt &Mosle LLP, a British law firm to represent government of Uganda in the arbitration proceedings at a cost of $8.6 million dollars.
Following the victory, the President acting on a request from senior government officials rewarded the 42 officials with Shs 6bn for their contribution.
The committee observes that the selection of the beneficiaries was not all inclusive. ‘For example, Bernard Sanya, the initiator of the tax two assessments was neither on the first list nor the second list of the beneficiaries. According to the report, there was a lot of informality and arbitrariness in the selection of beneficiaries.
“The committee concluded that the Shs 6n reward was contrary to standard practices of rewarding public officers, as provided for in the law. The President’s approval of the Shs 6bn was bonafide. However, it was an error of judgement,” the report reads.
The Committee recommended that all funds paid out of URA account to beneficiaries of the “handshake” should be refunded and all officers who flouted the law should be held accountable.
Responding to the report, Ali Sekatawa, Assistant Commissioner for Litigation, one of the beneficiaries of the handshake threatened to petition court over the report, arguing that the Committee selectively evaluated evidence before it, and thus came to wrong conclusions. He said parliament has no powers to order him to refund the money, since it was not given parliament. It came from URA’s account that had been appropriated by parliament. Parliament unanimously adopted the report.
“The Committee further established that whereas the costs awarded to URA by the Tax Appeals Tribunal and the High Court of Uganda has not been taxed and recovered, up to approximately $ 15 million has not been recovered. The bill of costs is yet to be filed. The International Arbitration Tribunal in Landon did award Government of Uganda costs amounting to $4 million which also remains unrecovered,” the report reads in part.
The report asks the Attorney General to recover the $ 4million dollars as costs awarded by the arbitration tribunal within 90 days from the date of tabling the report. However, Ali Sekatawa says it will be difficult for government to recover the costs from Heritage Oil and Gas Limited, since the company was delisted from the Landon Stock Exchange.
Following the revelations by former Energy Minister, Syda Bbumba, that she signed the Production Sharing Agreements (PSAs) without reading through the agreements, the report recommends that politicians should be barred from signing such agreements.
“Parliament should revisit section 8 of the Petroleum (Exploration, Development and Production) Act, 2013 with a view of amending it and provide for technical people to be signatories to PSAs. All recoverable costs incurred by oil companies should be submitted to parliament quarterly,” he report reads.
Weighing in on the report, Odonga Otto (Aruu MP), said “The good thing we have a report adopted by parliament, so even if it takes 10 years, the beneficiaries of the handshake will refund that money” he said.
By Edward Ssekika
About 25 kilometers outside Moroto Town, along the Moroto-Mukitale Road that leads to one of the Kenyan borders, is a limestone mining site located precisely in Katikitile Parish in Tapac Sub-County.
In the early 2000s, the site was abuzz with activity. “The entire sub-county of Tapac used to work here,” says Mr. Lokiru Sisto Dodoth, the Gombolola Internal Security Organization Officer (GISO). Locals set-up camp at the site which was busy with life. Work at the cement mining site was the main source of livelihood for majority of the residents. Today, however, only a handful of locals work at the mines.
“Then, about 60 – 80 trucks used to collect limestone daily,” Mr. Lokiru says. The limestone site which sits on over 49 square kilometers is one of two licensed mining areas Tororo Cement owns. The vast site is dotted with heaps of limestone boulders waiting to be collected. Some of the limestone heaps has been there for over a year without being bought, according to the Mr. Lokiru added. Despite this and the very hot sun, youthful men continue to toil; breaking huge boulders with sledge hammers and loosening others with crow bars. An elderly man, probably in his 70s, with the help of a cane, limps around a heap of boulders as he keeps a keen eye to ensure the young men nearby do not steal them. We are told the old man is waiting for his sons to come and start working on cement boulders.
At a distance, is a heavy duty grader owned by Tororo Cement that makes the work lighter. The grader digs-up the huge boulders loosening them for the miners to work on. You could be forgiven for likening the area as a labour camp. This work is “no-walk-in-the-park” assignment; yet the laborers often spend many months without pay.
“These days only about 9 or 10 trucks come for limestone,” says the GISO. He adds that this is further worsened by the poor state of the access roads to the mines, which complicates the ease of reaching the limestone markets. Consequently, limestone business in the area is very low and no longer lucrative for workers.
“When a truck comes to collect limestone, the obvious priority is put on the boulders closest to the access road. This also determines the ease and pace at which the 15ton or more boulders are loaded,” says Mr. Nathan Mushetsya, the Regional Inspector of Mines in the district.
There is a perception among the local residents of a conspiracy among truck drivers to marginalize the Tepeth tribe by preferring to load limestone collect by other tribes, thus depriving the Tepeth income. This perception is confirmed by the assertion of Mr. Lomel Peter, the Local Council 3 (LC3) Chairperson of Tapac Sub-County. “Our people are not given work; Truck drivers prefer to buy from other tribes, so locals do not get market and therefore income for their limestone,”
Mr. Thomas Lomel, a 35-year old worker says “he has worked at the site for seventeen years, but he has not benefited anything”. A father of seven, he is worried that after many years of toiling, his energy is dwindling and he fears he might not be able to fend for his family soon. He says, the income generation option available, which is agriculture is unfortunately a distant consolation.
The Mr. Lokiru reported that the region has not had meaningful agricultural produce in the last five years, because of adverse weather conditions. A record five-year drought hit the region in 2009 and its effects have continued to be felt to this day.
During a meeting with a team from Oil in Uganda at Tapac Sub-County headquarters, the Local Council officials blamed Tororo Cement for their financial woes and predicament.
“Every time we call the Tororo Cement Officials to meet with us to discuss our problems related with limestone mining, the officials refuse to come to the meetings”, Mr. Lomel said. He asked the Oil in Uganda team to help them meet with the Tororo Cement Officials, because “they as affected resident have failed to achieve this” he added.
Mr. Mushetsya, during an extractives stakeholders’ workshop organized by Action Aid Uganda, reported that he had met some of the officials of Tororo Cement Factory who informed him that they had selected a Liaison person at the district to link the affected residents with the factory. However, Mr. Lomel said that “the liaison person had not been of any help to the residents’.
The officials said “Tapac’s woes, unsurprisingly, include royalty related issues”. Bona-fide landowners where limestone is being extracted have never received their share of royalties remitted by Tororo Cement factory to the Central Government as provided in the Mining Act 2003”, the officials added. Landowners where mining activities are conducted are entitled to 3% of the total royalties paid by a mineral prospector as per the law. Instead, the royalty money was being sent to another sub-county through the Community Development Officer. The landlords reported that this issue has since been rectified and they are in final stages of registering an association through which they will be receiving their royalty money.
Mr. Paul Omonuk, the Production Officer of Tapac Sub-Country claimed that the sub-county does not receive the 7% of royalty as provided in the Law. He also asserted that the district restricts the sub-county’s use of the 7% royalty money remitted to the district claiming that at one time they wanted to buy a vehicle to ease their movements, but the district refused them to do so. However, this claim was refuted by Mr. Mushetsya who informed the participants at the workshop that the Sub-County has authority and mandate to use the royalty money as per their development plans. He explained that the district leadership cannot dictate how the Sub-County uses the money, because they held accountable.
The Oil in Uganda team also learnt that Tororo Cement pays Ug.shs7,000 per truck that leaves the limestone mines. But, this money never reached the sub-county. It was later discovered that Mr. John Bosco Moru, the former Sub-County Chief, used to receive the money and use it for personal interests without the knowledge of the community. Mr. Moru was subsequently dismissed upon the discovery of his illicit conduct.
Based on the submissions of the workshop participants, they suggest that there is an information gap between Tapac Sub-county and Moroto Local Government that is responsible for the unease between the two parties. There is need for timely sharing of accurate information between the two parties.
Tororo Cement sets Record Straight
The Tororo field office is located in Kosiroi about 5 kilometers from the limestone mines. While there, the Oil in Uganda team spoke to the site manager, Mr. Kennedy Akenda together with a few other staffs who were disappointed with the accusations being leveled at Tororo Cement Factory by the Tapac Community members
Mr. Akenda explained that “the miners’ predicament regarding low business volume as a result of reduced number of trucks ferrying limestone was attributed to a Uganda National Roads Authority (UNRA) directive to the reduce the number of truck plying the route and the tons ferried to avoid continued spoilage of the roads”. He added that “the other factor responsible for the low business volumes was the profitability of ferrying fewer tons of limestone: truck owners found it not profitable to ferry only 11 tons of limestone over a distance of 300kms and consume more than 250 liters of fuel, so many truck owners opted out of the business and put their vehicles to other use” Kennedy said. “The distance from Moroto to the factory in Tororo is over 300km. It does not make business sense to ferry low tonnage of limestone and a high transport cost” Kennedy added. He informed the Oil in Uganda team that “the factory was expanding and setting-up another plant; “maybe then
Mr. Akenda further explained that they were instructed by Tapac officials to withhold payments on truck royalties until the mess created by the former Sub-County Chief is sorted. Once the Tapac officials give the factory clearance to remit the royalty money, they will do so accordingly, because they have clear records.
This explanation from the officials of the factory notwithstanding, the Tapac leaders are determined to pursue the matters until they get what belongs to them as benefits. They warned the factory from bringing their own labour force to mine the limestone, arguing that the community members are ready to mine and sale the limestone to the factory.
The Tapac leader reported that they are in negotiations with Tororo Cement over a Memorandum of Understanding (MoU) that will guide their relationships.