An analysis of the impact of the oil and gas industry on host communities in Uganda

The discovery of commercial quantities of oil and gas in Uganda was met with optimism by many of the stakeholders in Uganda. Promises were made as to how people’s lives would improve. To many in the host communities, the oil and gas discovery was the answer to their prayers. Despite concerns about the "oil curse," the state and oil companies promised to adopt international best practices and standards and learn from other resource-rich states.

Fast forward to 2023, the process of compulsory acquisition of land is almost complete, but have the blessings of the oil and gas industry rubbed off on the shoulders of those people whose land was affected?

The benefits that have accrued to the host communities from the oil and gas sector are well documented, including good roads, increased employment opportunities, increased demand for goods and services, and skill enhancement. However, some people within the communities have been adversely affected by the project.

It is not uncommon to hear stories of project-affected persons who were landlords before being affected by the oil project and are now landless. Some PAPs claim that the compensation rate for land is too low and inadequate to buy land of the same size in the same locality because the price assigned to the land by the Chief Government Valuer is much lower than the actual prevailing market rates. This is compounded by the fact that the valuing of the land and the actual payment of compensation are separated by time, which can be up to 4 years apart. It is common knowledge that land appreciates in value with time. Some PAPs also say they were forced to take cash compensation and desired compensation in kind. The cash received was inadequate for them to replace their assets since it was too small.

Most PAPs appreciate that compensation is not meant to enrich them, but it should at least not make their quality of life worse. Some PAPs complain that they were resettled in areas without basic social amenities like schools, hospitals, and access to clean water and areas that were rocky as opposed to their original pieces of land that were fertile. Many CSOs have raised concerns about delayed compensation but for many reasons, this concern still exists. PAPs whose land was categorized as estates and who did not have letters of administration have been hit the hardest. The oil companies committed to helping them procure the letters of administration, but 4 years down the road, many have not yet been procured despite the PAPs doing all that was required of them.

Instances of land grabbing are on the rise in the Bunyoro region, and land disputes are at an all-time high. For example, in Buliisa, many people emigrated from the area because the climatic conditions were harsh. These areas were later occupied by others, and oil was discovered in them. Now, the original owners are fighting over ownership of the land to benefit from compensation. There are also disputes between families and clans over compensation and who is to receive what. This is worse in areas where land is held communally.

Compensation rates for crops and other properties are supposed to be revised annually, but it is common to find that a district has no updated compensation rates. This is attributed to a lack of facilitation to sit and deliberate on the issue, or delay by the Chief Government Valuer to approve the rates. In instances where the rates are up-to-date, they are unrealistic and do not reflect the true value of the property. Some PAPs say that the rates, although reflected in the district compensation rates books, are too low and unfair. Some property is omitted from the compensation assessment forms, and rectifying these errors and omissions can take a long time. The Grievance Handling Committees that were constituted were ineffective. Lodging a complaint in the grievance handling system is just a formality because more often than not, the original decision is upheld.

In Buliisa, nine PAPs were taken to court by the government over a dispute regarding compensation. The PAPs believed that they were entitled to more money than what they were offered. The government made an application to the High Court of Uganda, asking to deposit the compensation money that the PAPs were entitled to into the court. I find this approach to be unfair. Instead of resolving the PAPs' complaints, the government is making them go through undue hardship, both financially and otherwise, to defend the application. The PAPs are disputing the amount of money they are entitled to, yet the government is depositing the same amount of money in court. The best solution would have been to resolve the question of how much money the PAPs are entitled to through a lawsuit. Whether this practice of depositing money in court is constitutional or not is the subject of a constitutional petition.

If it were possible to go back in time and change one thing, it would be to provide more financial literacy to the PAPs. Some PAPs used the compensation money to start new families, while others spent it all on alcohol. For instance, in Buliisa, one PAP who received compensation bought a motorcycle, which was impounded by the police shortly thereafter. Instead of processing the release of the impounded motorcycle, he bought another one. There were some PAPs who used the compensation money wisely and were able to build great wealth from it, but unfortunately, they were the exception rather than the rule.

It is worth noting that different projects offer different rates for land compensation. For example, UNRA offers higher compensation rates for land than EACOP, even when the assessments and valuations coincide in space and time.

It is also worth noting that the oil companies are learning as they go along for example, the houses in RAP 2-5 are better in design and outlook compared to RAP 1 in the Tilenga project. But is it just for the oil companies not to remedy some of the wrongs they did in RAP 1?

I would also like to commend the oil companies for remedying the majority of the concerns that are brought to their attention, but however, they should not pat themselves on the back until each and every concern has been addressed. It is not a defence for them to say that they have addressed the majority of the concerns when a specific concern that is not yet addressed is brought to their attention. Mitigation measures have been put into place to reduce impacts like dust pollution, and flooding, especially in Buliisa. However, new adverse impacts are arising for example, houses are getting cracks as a result of vibrations from the heavy machinery that are being used.

Disclaimer: These are my opinions and they should not be taken as those of my employers.