Risk of poverty after land acquisitions for Uganda’s mega oil pipeline

Construction of a feeder pipeline inside Murchison Falls National Park, in northern Uganda. Photo: Just Finance International (2022)

The construction of the world’s longest heated crude oil pipeline between Uganda’s Lake Albert and the shoreline of Tanzania is threatening the livelihoods of hundreds of families. The companies responsible for the 1,443km pipeline, including China’s CNOOC and France’s TotalEnergies, are accused of providing inadequate compensation to displaced families, increasing the vulnerability of elderly and disabled people, and female-headed households.

Rose Nakabito points to the ground half a meter from the wall of her red brick house in Nabigasa village in Uganda’s Kyotera district.“

Exactly here, the pipeline will go,” she says.

Rose shows us the healthy coffee plants, vegetable crops and banana trees that make up her farm. The produce feeds the family and she sells vegetables in the market to pay for school
fees and other expenses for her children.

Rose Nakabito in front of her house. In the beginning of 2023, it will be torn down to give room for the East African oil pipeline. She said she did not receive any compensation and has nowhere to go when construction starts. Photo: Just Finance International (2022)

Three months from now, her house and farmland will be gone. The area has been expropriated by the East African Crude Oil Pipeline (EACOP), a consortium owned by the governments of Uganda and Tanzania, French oil company TotalEnergies, and China’s energy giant
CNOOC. When the pipeline is operational, about 246,000 barrels of oil will flow on a daily basis, just half a meter under the rich, dark soil that Rose’s family have been cultivating for generations.

The pipeline project connects Tilenga and Kingfisher upstream oil fields on the shores of Lake Albert with the main 1,443km heated underground pipeline to the Tanzanian port of Tanga. Photo: Just Finance International (2022)

Rose is separated from her husband and says she has received no compensation for the loss of her land and crops. She is now unsure how to support her family when the excavators arrive. The compensation for land along the pipeline has been paid to the men in the village, according to the locals, but many single women have received nothing.

The ongoing acquisition has created widespread unrest and anxiety in communities along the pipeline route where land has been compulsorily acquired. No one that Just Finance International met during a recent field trip along the pipeline route was satisfied with the compensation they had received or been offered, claiming the money won’t buy them equivalent farmland elsewhere or housing. Some claimed they were offered 30-50 percent less than the value of the land they had to give which rendered them unable to replace the
same piece of land even within the same area.

Disabled people and the elderly have been neglected in the land acquisition process as they were unable to travel to all the meetings with the pipeline companies. They have not received compensation. Community members claim that the oil companies did not fully understand how many people’s livelihoods depend on each plot of land.

Marry Nyambubi, in front of her old house in Kitegwa village. The house will be torn down shortly. China’s CNOOC have built her a new, smaller house, but she is not pleased and doesn’t think it suits her needs. Photo: Just Finance International (2022)

As in most East African communities, farmland in Uganda is traditionally owned by men but cultivated by women. The companies have mainly chosen to compensate men in the communities, excluding many women from planning resettlement for their households. When the money comes, the women never see it according to interviews conducted by Just Finance International. In some cases, women were abandoned by partners after the payment of compensation.

The acquisition process has also exposed land disputes between neighbors in the villages. Ownership of land is not always clearly defined, renewing old conflicts as different families
claim rights to the same land.

Moses Kalyango, who is the youth leader in an EACOP-affected village in Rakai district, west of Lake Victoria, says the pipeline has created difficulties in his village.

“We were happy when we first heard about this project, thinking that our lives were going to change, and the community was going to develop. The companies promised us jobs and good compensation. But now we are disappointed. We did not get enough”, he explains.

Moses thinks the whole acquisition process should be restarted.

“My father has been struggling to get this land. It wasn’t given to him. So why should they come and take his land? The whole process should be revised. This has hurt us so much” he says.

Moses Kalyango is a youth leader in the Rakai district. He thinks the whole acquisition process should be revised. Photo: Just Finance International (2022)

Some of the community members in Rakai village are considering legal action, but they don’t trust the independence of Uganda’s legal system, and they know the process will take many years and the outcome will be uncertain. Few of them can afford to hire a lawyer.

Others in the community are considering protesting in the nearby town instead, but the fear of police violence is making them hesitate. For now, they don’t know what will happen when the excavators arrive in the village at the start of next year.

When the oil companies first arrived in Moses Kalyango´s village in the summer, the community had little choice but to accept the compensation they were offered. The companies told them to take the money or they would not get anything at all, he says.

In the Lake Albert district in western Uganda, trucks are bringing in the heavy oil rigs and construction equipment needed to extract the oil and construct the pipelines. After that, a 30-meter wide, two-meter deep moat will be dug all the way from Western Uganda to the shore of Tanzania on the Indian Ocean.

The EACOP consortium is responsible for the land acquisition in Uganda, but it is implemented by CNOOC, Total Energies and their subcontractors. The expropriated land is owned by the Ugandan government but will be leased to EACOP for 66 years.

On their website the EACOP consortium assures that all landowners and land users affected by the land acquisition process are treated with respect and receive compensation at full replacement value. Furthermore, EACOP claim it is constructing and providing replacement houses for displaced households. The consortium will sign compensation agreements with each affected person, household or institution according to the Resettlement Action Plan.

In Uganda, more than 25,000 individuals are affected by the EACOP project and over 200 households need to be resettled, according to TotalEnergies’ environmental and social assessment report.

New houses under construction for displaced community members near Hoima. In some places people from farming communities were forced to live together in town-like settlements where they unable to keep livestock and cultivate. Photo: Just Finance International (2022)

However, a European Parliament resolution gives a much higher figure, estimating that more than 100,000 people in Tanzania and Uganda are at imminent risk of displacement because of the pipeline. The Parliament is also worried that many of the affected people will not receive proper guarantees of adequate compensation from the project developers.

The plan for resettlements in Uganda has also been criticised by civil society organisations, which claim that the EACOP consortium has failed to uphold its human rights responsibilities and commitments. This is due to insufficiencies in the country’s legal framework and a
failure by Uganda to guarantee legal security of land and related natural resources to its citizens, such as issuing adequate land titles.

According to the UN Guiding Principles on Business and Human Rights, the companies are required to put in place a human rights due diligence process “assessing actual and potential human rights impacts, integrating, and acting upon the findings, tracking responses, and communicating how impacts are addressed”.

During the fieldwork in Uganda, Just Finance International found no evidence that such a process was in place. On the contrary, most of the affected people claimed that communication from the consortium and implementing companies was insufficient.

According to Dickens Kamugisha, chief executive officer at the Ugandan NGO AFIEGO, the acquisition process has been unsatisfactory. Land-for-land compensation, with resettlement
options, would have been a more appropriate approach than cash compensation since most of the affected people have limited or no formal education and are not financially literate. In many cases, people have misused the compensation and will have nowhere to go when the pipeline work begins.

AFIEGO has been providing legal help to communities affected by Uganda’s exploration of oil since 2013. Dickens Kamugisha claims the EACOP consortium is ignorant of how people in the countryside live and how they have survived for generations. If they would have done
the due diligence they would have used different methods for compensation.

“More research should have been done before the resettlement process started. The companies don’t take enough time to understand the culture and the way people live”, he says.

So, what will happen to all the people who did not get any compensation, too little compensation or misused it?

Dickens Kamugisha is concerned that when work begins, many vulnerable groups such as the elderly or disabled people will have nowhere to go as they have been given no special consideration. If nothing is done to change the situation, he fears that some people will starve.

“Only the strong are going to prevail. This is one of the biggest tragedies of this project”, he said.

Just Finance International has, on a number of occasions, contacted the EACOP consortium for comment, but to date, it has yet to provide a response.

The Just Finance International survey in Uganda
During fieldwork in Uganda, Just Finance International held several meetings with people affected by the EACOP in the Lake Albert district in Kyakaboga county, Kyotera district and in the Rakai district. In total, 150 people testified, raising concerns over the ongoing acquisition process.

The EACOP consortium
The biggest shareholder in the East African Crude Oil Pipeline (EACOP) is UK-registered TotalEnergies with a 62% stake in the venture. The Chinese public company CNOOC (China National Offshore Oil Corporation), has an 8% stake. The Ugandan and Tanzanian national oil companies are also shareholders in the consortium with 15% each.