The Politics of Poverty

Ideas and analysis from Oxfam America's policy experts

Love in the time of oil

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Proposed oil pipelines. (Source: http://on.ft.com/244NcXa)

New East African oil pipeline may win political hearts, but has the potential to put communities at great risk.

For the last year, Uganda has been caught in a love triangle.  Harboring precious oil resources in its Lake Albert region, Uganda has been the subject of intense courtship from its neighbors, Kenya and Tanzania, over which of the two countries would host the longest, heated oil pipeline to the sea. For many months, Kenyan President Kenyatta’s government – and the British oil company, Tullow – were claiming that there was an MOU for the pipeline to go the northern route, ending at the coastal town of Lamu.  Unbeknownst to Kenyatta, the Ugandan president, Yoweri Museveni, was also, surreptitiously in talks about a deal with Tanzanian President John Magufuli.  Awkward.

After many weeks of wooing phone calls, secret meetings and lobbying back and forth, Uganda finally announced its choice in late April. A $4 billion, 1,400 kilometer pipeline will snake south around Lake Victoria and terminate ultimately in Tanzania’s northern port of Tanga – the route strongly lobbied for by French multinational, Total. Magufuli’s proposal ultimately won over Museveni’s heart (and purse strings) and Kenya sadly got dumped. And the presidential couple seem very happy together. Oil gets exported, purportedly 15,000+ jobs are created, both governments make money, and international oil companies are happy. A match made in heaven, right?

But wait. While the big men in the capitals celebrate a done deal and talks now shift to “move very fast” to implementation, the story on the ground does not necessarily spell ‘happily ever after.’ While news headlines may focus on purported gains, the pipeline will no doubt come with risks and heavy social and environmental costs. The pipeline will partially encircle Lake Victoria, Africa’s largest lake and a critical source of biodiversity and livelihoods for local fishermen.  In addition, Murchison Falls National Park, where Uganda’s oil wealth is found, is now under threat. And this says nothing of the people themselves who will live with this pipeline in their backyards.

Both countries are no strangers to projects with overlapping footprints in communities. The Tanzanian Minister for Energy and Minerals, Sospeter Muhongo, reported that the two countries were already discussing the resettlement of communities and how people will be compensated. But this has not always gone so smoothly.

In 2014, hundreds of residents were reportedly displaced or forcibly evicted from their land in Hoima, Uganda, near Lake Albert in order to make way for a petroleum wastewater facility.  Reports of shootings, teargas, and the burning and looting of homes are just a snippet of the associated human rights abuses. These grievances are severe and real; resulting in the eviction being deemed unlawful and the residents filing for 64 billion Ugandan shillings (nearly US$20 million) in compensation.

To enable Uganda to export processed oil, the government is also planning to construct a refinery in Hoima District.  Since 2012, some 7,000 people have been displaced or evicted to make way for the refinery, and, to date, the resettlement and compensation process has been fraught with conflict and inequality.  Families contest they have been grossly undercompensated for their lands, some are still waiting to be relocated, and women, who largely farm land for the family’s food production, have been left out of the consultation and compensation process – putting their livelihoods at risk.  Across the border, in Tanzania, cases of community level dissent are not uncommon either.

Hoima residents affected by the refinery demanding compensation. (Photo: Francis Mugerwa / Daily Monitor)
Hoima residents affected by the refinery demanding compensation. (Photo: Francis Mugerwa / Daily Monitor)

In southern Tanzania, where there is natural gas and vast amounts more discovered offshore, local citizens in Mtwara arose in violent demonstrations against an announcement in 2013 of a pipeline to be constructed from Mtwara to Dar Es Salaam. Residents were angry that, rather than being processed in Mtwara and thereby creating more jobs and opportunities locally, the gas resources were going to be piped up to the capital to be processed and shipped out.  Demonstrations lasted days with reports of several injuries and deaths.

Citizen protests in Mtwara. (Photo: The Citizen)
Citizen protests in Mtwara. (Photo: The Citizen)

Cautionary tales must be heeded. The Ugandan Minister for Energy and Minerals Development, Irene Muloni, remarked to reporters last week that in order for this pipeline to succeed, “we need support from everyone including communities and the media.” She’s right. The stories from Tanzania, Uganda and countless other countries are proof.  While the head honchos of Tanzania and Uganda cozy up to break ground by next year to reach their target of pipeline completion by 2020, shortcuts to real, meaningful community consultation and transparency cannot be made.

Kenya, jilted by the deal, is going solo. The government is planning to move forward to build its own US$2.1 billion pipeline from Turkana through to the port of Lamu on the Indian Ocean by 2021. The Ministry of Energy and Petroleum Minister has indicated some interest from the African Development Bank and the World Bank’s International Finance Corporation to help finance the project. The government has also been pushing for early production to be transported by truck and train, raising additional environmental and community impact concerns.

If Magafuli and Museveni want their ‘happily ever after,’ they must ensure that decisions are made with those who will bear the brunt of the impact, and take into consideration the full spectrum of risks to communities and the environment. People must be in a position to make informed choices about their land and compensation and have realistic expectations of what these projects entail for their future.

Governments need to ensure that they have adequate legal provisions for land rights and compensation and regulations for resettlement that line up with international standards. Currently, the only legal instrument available to guide resettlement processes in Uganda is the long outdated Land Acquisition Act from 1965 — that’s 30 years BEFORE the current Constitution of Uganda came into force. It is imperative that the government modernizes its land laws and put in place clear and transparent guidelines for resettlement, before they forge head with pipeline construction.

So, some relationship advice? Take it slow. Because when the honeymoon phase is over, a successful, on-time and on-budget pipeline may be nothing but a pipe dream.

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  1. hgcom1@hotmail.com'Henry Godfrey Mwangamilo

    Human rights and the extractive industries.What should be the fundamental principles that need to be addressed when looking to relocate communities?What elements should a community development agreement entail and what process should be followed to reach agreement?

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