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Uganda’s oil explorers walk a tightrope over global environmental protection requirements

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By ANGELO IZAMA Special Correspondent

Posted  Saturday, June 22  2013 at  13:02

In Summary

  • Tullow, which farmed down its assets to bring in Total and CNOOC, is worried that the Uganda government will delay issuing permits over concerns on “biodiversity” value as request by the World Heritage Committee.
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A request by the World Heritage Committee to cancel oil exploration permits within Democratic Republic of Congo’s Virunga National Park is a blow to Uganda’s oil programme, flagging the complexities of balancing environmental concerns and petroleum activities in one of the only places in the world where both exist in abundance.

Oil companies in Uganda avoid the conservation versus development debate. The companies fear damage to their business reputation if environmental harm occurs.

The firms are also concerned about penalties arising from environmental damage as well as difficulties in raising public money to finance projects that are bonded to international conventions such as the World Heritage Convention, or the Ramsar Convention on the Protection of Wetlands.

Virunga is in the western branch of the Great Rift Valley.

International financial institutions have embraced the protection of globally significant sites, obligating companies like France’s Total — which holds licences in both the Virunga and in an area within Murchison National Park in Uganda — to protect the environment or risk losing financing.

These obligations are contained in the social and environment standards agreed to by the International Finance Corporation, the investment arm of the World Bank, as well as the Equator Principles, a voluntary code of responsible project financing to which most international banks have signed up.

A May 2012 document developed by Tullow, and shared with its partners Total and the China National Oil Corporation (CNOOC) titled Lake Albert Development specifically takes issue with the Ramsar wetlands, national parks and reserves.

Tullow, which farmed down its assets to bring in Total and CNOOC, is also worried that the Uganda government will delay issuing permits over concerns on “biodiversity” value and fretting that developments will “likely bring to the fore the NGO community and international pressure groups.” 

They were not wrong.

Until now, and despite investing hundreds of millions of dollars in the Albertine Graben, oil companies such as Total and Tullow have avoided a robust public debate on the risks to the environment of exploiting oil in protected areas, preferring to focus their preparation on internal plans and engagement with the government.

The Ugandan government, in March, concluded a voluminous 300-page Strategic Environment Assessment (SEA) on oil and gas activities in the Albertine, to serve as a guiding document in confronting these challenges.

In its recommendations, the SEA states that oil and gas “activities in areas that are formally designated for eco-system protection and biodiversity conservation should be in accordance with the official protection status of the area.”

Environmentalists such as Paul Mafabi, a former member of the Ramsar standing committee and a commissioner in Uganda’s Water and Environment Ministry, have faulted the government and the oil companies for working backwards on the issue.

“Ideally the processes should have started before,” said Mr Mafabi, referring to a Ramsar resolution that urges the use of the SEA and environmental impact sssessments (EIAs) as precautionary tools to determine the potential damage to such ecological assets as the protected wetlands in Murchison Falls around which Total is drilling.

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