The Observer (Kampala)

15 August 2014

Uganda: Oil Refinery - NGO Finds Holes in Compensation

Gilbert Rubanga navigates through a bush to access his grass-thatched mud- and-wattle hut at Nyahaira village in the western district of Hoima.

Rubanga is a cattle keeper and farmer, growing bananas, maize millet and sorghum. However, his livelihood now seems threatened by the government's plan to construct an oil refinery on 29 square kilometres of land at Kabaale parish, Buseruka sub-county in Hoima.

In 2012, the government, through Strategic Friends International (SFI), an agency implementing the land-acquisition programme for the refinery, surveyed Rubanga's land and estimated it to be 7.4 acres. He was then promised resettlement, as a form of compensation. In the last two years, however, Rubanga has watched his once bustling village, hitherto full of households, women and children, become desolate, as more people are forced to give up their land to the refinery.

Today, he lives in isolation, surrounded largely by overgrown bushes. Of the 7,118 affected persons, only 52 per cent have so far been compensated. Another 93 families, including Rubanga's, who opted for resettlement, are still waiting.

"My property was valued but the registry does not capture it," says Rubanga. "I lodged my complaint but they told me to be patient."

Oil potential, land dilemma:

When the government identified land for the refinery, it stopped any further developments on the land, or the planting of, the more profitable, perennial crops.

"When we raise complaints, the government says we want to sabotage their project. For us, we want to be relocated and pave way for them. The security of the area is fragile, thieves are robbing us," Rubanga says.

The government says that this year, it has earmarked $14m (about Shs 36.8bn) to complete the acquisition of land to relocate and/or pay the remaining 48 per cent of the affected persons. By this time in 2016, according to government projections, Uganda will have produced its first barrel of oil. An estimated 3.5 million barrels are buried in the Albertine graben. Estimates indicate that at peak production of 200,000 barrels a day, the country could earn up to $3.3 billion (about Shs 8.7 trillion) annually.

Building an oil refinery would enable Uganda to export processed oil, bitumen, aviation fuel and other by-products to the East African region and beyond. The land on which the refinery is to be built is individually owned by indigenous people in Hoima. Article 237 of the 1995 Constitution protects the land rights of locals in the oil region.

The law also provides for compulsory land acquisition, where such is done for the greater benefit of the public than the individual. The law, however, demands that the landowner should be compensated fairly, promptly and adequately. The National Land Policy recognises the land rights of ethnic minorities like Rubanga.

It states that large-scale commercial enterprises such as mining, logging, commercial plantations, oil exploration, often take place at the expense of the rights of such ethnic minorities. Since minorities occupy land on the basis of precarious and unprotected land rights systems, they are exposed to constant evictions, removals and displacements.

The policy affirms that compensation has often not been prompt, adequate and fair as provided for by the Constitution. While the government contracted an implementing agency, SFI, to develop the resettlement action plan (RAP) to guide resettlement of the communities, its implementation has exposed glaring weaknesses.

While the RAP provides a reasonable mechanism for working with the affected communities, research done by Global Rights Alert (GRA), a civil society organisation, shows that communities in the oil refinery-affected areas were not consulted during valuation of their land and developments. According to GRA, the locals do not know the sources of the rates for their land valuation, let alone what has been applied against their crops.

A resident of Kitegwa village, only identified as Grace, said she was told that for an acre garden of sugarcane, she would be paid some $3 (about Shs 7,900). This value, she argued, was a mockery of her right over the land and as a farmer, considering that on open market, she sold a single sugarcane at Shs 50.

Victims of ignorance:

The executive director of Global Rights Alert, Winnie Ngabirwe, says landowners such as Grace are victims of ignorance.

"People were required to sign compensation agreements [written] in English and we don't know if they understood what they were signing. It is much worse with women. They signed but did not know what they were signing for.

When it came to valuing their land, they were not given chance to calculate the value of their plants," Ngabirwe says.

Some landowners told The Observer that they had signed documents acknowledging receipt of compensation funds but, in reality, they were not paid. Patrick Musisi, also from Kitegwa, says he signed documents in 2012 which valued his 13 acres of land at $1,400 (about 3.7 million) per acre. Today, the land is valued at $2,800 (about 7.4 million) per acre.

The communications manager in the ministry of Lands, Housing and Urban Development, Dennis Obbo, acknowledges that cases like that of Musisi highlight the need for making prompt payments to the affected communities.

"If compensation was done in 2011, using compensation rates of Hoima of 2011/2012, it is only fair that the people be paid at that time and not later years. Now the value of land has appreciated and if you are using the rates of 2011, then it brings a problem," says Obbo.

Some of the people affected by the proposed refinery say all landowners who preferred relocation over compensation would not receive the same land acreage or size they owned before. This was allegedly so because in resettling a household, the implementing agency hired by government would spend a lot to construct a more-permanent dwelling house.

For instance, one couple in Kitegwa village owned 22 acres but they claim that they were told they would receive not more than five acres in return if they opted for a resettlement.

"This argument advanced for not restoring the same land size militates against the principle of compensation for which affected communities are supposed to be put in a position similar to the livelihoods each enjoyed prior," says Ms Ngabirwe.

But Bashir Hangi, the communications officer for the Petroleum Exploration and Production department in the ministry of Energy and Mineral Development, says people will be given the same size of land when they are relocated and resettled in Kyakabogo, Hoima district.

"We undertook a social economic study to get to know their livelihood status and we need to know that [compensation] land favours [their] livelihoods. So, that is why we got a place near to where they have been. If you had a grass-hatched house, we give you a permanent house so that people are much better than they were," Basil says.

Women left out:

Another glaring issue in the compensation scheme is that the women, who are the biggest producers on land, and yet own very little land in the oil refinery-affected areas, have been left out. While the Constitution and Land Act provide for equality of treatment and protection, women are not sensitised about compensation.

They do not give consent or sign documents, and the compensation is mostly paid to their husbands. Documents do not have provision for spousal consent and participation. Bank accounts opened for the compensation process are largely registered in names of men.

The GRA research reveals that this ignores the protection of interest in land where a family ordinarily derives sustenance. It puts women and children at risk in situations where irrational and irresponsible men or husbands could misuse the compensation sums through engaging in social evils of drunkenness and prostitution, or remarrying.

Godfrey Nyakahuma, the resident district commissioner of Hoima, says he does not know why women were not consulted and included in the compensation.

"It all goes back to that fact that people were not prepared. We need a hand to prepare these people in financial management. Government cannot enter into an arrangement of putting people in classes; that is the work of civil society organisations and banks where this money was posted," Nyakahuma says.

He adds that because people were not prepared to handle huge sums of money, they have not used it properly. Men divorced their wives in the villages and moved to urban areas where they married new wives, bought cars and motorcycles. "As we speak, they have gone back to zero. I don't know why it is only men who received money," he says.

"Their wives and children were left suffering because many didn't benefit from the compensation."

The article was produced with support from the African Centre for Media Excellence

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