Uganda’s Land Acquisition Process For Oil & Gas Infrastructure Mirrors Best Industry Practices

By Ali Ssekatawa

During the next 5 -10 years, Uganda’s land acquisition processes for oil and gas infrastructure will become the benchmark for best practices for mega projects that require large chunks of land.

The success of any mega infrastructure or construction project, as is in the case of the oil and gas industry world over, which requires a foot print is mirrored in the quality of processes such a comprehensive Resettlement Action Plan (RAP). The RAP encompasses planning (and implementation) for compensation, and resettlement of the Project Affected Persons (PAPs).

Uganda’s RAPs for the oil projects were designed with one overarching principle of the PAPs in mind. To leave the PAPs in a better situation than previously found.

As a result, the implementation of the RAPs have surpassed the minimum standards set under the Ugandan law, the International Financial Corporation (IFC) Performance standards, and other international best practices.

For instance, the Uganda law requires that the owner and land users are fully duly compensated before his/her land is accessed by the project developers. The IFC Performance Standard-5 implores project developers to avoid involuntary resettlement, wherever possible, and to minimize its impact on those displaced through mitigation measures such as fair compensation, and improvements to living conditions. Active community engagement throughout the process is essential.

The land for Uganda’s oil and gas projects is acquired by the Government through the Ministry of Energy and Mineral Development. and the Licensed Oil Companies which will be granted leases. The process is monitored by the Petroleum Authority of Uganda (PAU) to ensure that all laws and regulations have been observed and the PAPs are given adequate compensation.  

The land requirements for the three major oil and gas projects are as follows; 1,258 acres for the Kingfisher Development Area (KFDA) operated by CNOOC Uganda Limited (CUL) with a total of 788 PAPs, 2901.4 acres for the Tilenga Field Development Area operated by TotalEnergies E&P B.V Uganda (TEPU) with a total of 5,551 PAPs, and 2,740 acres for the East African Crude Oil Pipeline (EACOP) with 3792 PAPs.

Status of resettlement and compensation

As at end of February 2023, resettlement and compensation stood at 99.5% for KFDA, 94% for Tilenga and 65% for the EACOP Project.

Over the above three projects, 111 resettlement houses have been completed and 93 handed over to PAPs, 242 are under construction and 154 sites handed over to contractors to commence construction. 

The land acquisition process for Uganda’s oil projects is taking a careful, social and people centered approach. After a complete due process, which involves surveying, valuation, disclosure of benefits and entitlements, grievance redress, financial literacy training, and compensation. In addition, there are other benefits that a PAP is entitled to.

A PAP is entitled to at least three months’ vacation notice which can only come after the PAP has been fully, and adequately compensated.

The PAPs are also entitled to disturbance allowance of 30%, and a 15% per annum uplift for the period of delay since issuance of the cut-off dates, on top of their compensation for the value of the land and property.

In the case of primary residences, a PAP is given two options: cash or house replacement. A PAP who chooses a house cannot be asked to vacate before the new house is completed. The houses are modern houses, a person who originally had a grass thatched house, gets a modern one at no cost of his or her own. The new homes come furnished with a water tank, solar system, a kitchen, and an outside toilet.

After handing over the house, the PAP is then oriented on how to use the house under the psycho-social support arrangement and given food packages for six months.

Thereafter, livelihood restoration program starts. To comply with the international standards, livelihood restoration plans are required to be in place. Through this, PAPs are given different options to choose from and the activities are supposed to take three (03) years after which post livelihood and land acquisition audits are done.

With complex land tenure systems in Uganda, the process is not devoid of challenges like multiple claims, spectators, fraud, delayed payments, etc.

The process has a multicentered grievance mechanism which is structured like the LC system but involves the PAPs, their leaders, government officers, PAU, consultants, CSOs and oil companies before submission to court. No wonder, that less 2% of the grievances have required court adjudication.

Ali Ssekatawa is the Director Legal and Corporate Affairs at the Petroleum Authority of Uganda