Uganda: New plan to hold oil companies liable for spills, requiring them to compensate affected communities

By Martin Kitubi, New Vision,

September 2, 2020

The government of Uganda is in the final stages of developing an oil spills contingency plan, which will introduce stringent guidelines for concerned oil companies.

The plan says the oil companies will be held responsible for any kind of spills and damage, as well as compensating all the affected entities.

According to the plan, the move should ensure that the companies involved in the oil activities take extra care to protect the environment and the people in the affected area.

"A licensee, operator, or other responsible person is liable for pollution damage caused by the escape or discharge of oil during an oil spill incident, regardless of fault," the draft contingency plan states.

It adds that: "The cost of oil spill response operations, including clean-up and restoration cost, shall be borne by the licensee or operator."

Where Government assists the companies in managing oil spills, the contingency plan says, the costs incurred during the Government involvement too shall be borne by the companies, not the government.

In circumstances where financial security is required from the oil companies, the spills plan proposes, the Government may use that security to recover costs incurred in oil spill response operations.

The development of the oil spills contingency plan started in 2013 by the National Environment Management Authority (NEMA) and other relevant government institutions.

These include ministries of energy, water and environment, Office of the Prime Minister and Local Governments as well as the Petroleum Authority of Uganda. The requirement to develop the contingency plan is provided for in the National Environment (Oil Spill Prevention, Preparedness, and Response) Regulations 2014 and the NEMA Act.

In a recent interview with New Vision, Gloria Sebikari the manager in charge of corporate affairs and public relations at PAU, said over the years, a number of reviews have been done to reach the final plan.

She said it should be ready any time now.

DAMAGE AND RESTORATION

The Office of the Prime Minister (OPM) will coordinate the implementation of the contingency plan, according to an official who preferred not to be named. "Oil spill incidents often involve claims for damage to property, business disruption, harm to human health or the environment and other matters," he said.

"In case of any emergencies, the Office of the Prime Minister in liaison with the Petroleum Authority of Uganda (PAU), shall establish a mechanism to co-ordinate payments of claims and compensation," the contingency plan reads.

The Prime Minister's office and PAU will also co-ordinate the recovery of costs of an oil spill and response operation.

According to the plan, claims from third parties for any of the mentioned occurrences will be settled by the oil companies as the law stipulates.

The plan suggests that: "The licensee, operator, or other responsible people may take out insurance against any insurable risks that may result in claims. But that issues of costs and claims may be handled by mutual consent, arbitration, or recourse to courts of law.

The contingency plan has also recommended that oil companies will meet bills for the restoration of the affected areas.

"Licensees and operators shall be responsible for the demobilisation of their oil spill response, restoration of contaminated sites, and post-oil spill monitoring," the plan reads.

Rehabilitation in protected areas and conservation areas will also be conducted by the licensee, operator, or other responsible people in consultation with the relevant lead agency, the plan says.

The plan also says when the cleanup operations are completed, a government multi-agency team will monitor the recovery of the ecosystems and restoration of impacted areas. The government ministries and agencies that will jointly monitor the recovery include the ministries of water.

RATIONALE FOR PLAN

The plan creates proper mechanisms for the protection of the sensitive ecosystem including land and water bodies. The plan will also be used to ensure the health and safety of oil spill responders and the public during oil spill response operations.

The contingency plan will also be used to establish a coordination mechanism for preparedness and response from licensees and operators, local governments, government, and other stakeholders, in order to counter the threat posed by oil spills on human health and the environment.

WHAT OTHERS SAY

Dinah Nabiruma, a senior communications officer at Africa Institute for Energy Governance, said the contingency plan should focus more on avoidance of spills.

"The impacts of oil spills on biodiversity destruction, food security, safe water access, the health of communities and security are so immense that avoidance is best," Nabiruma said.

She said, in Nigeria, where oil spills are common, the fisheries sector, security (the Niger Delta has high kidnapping rates), health (pre-term births) have suffered. She said Uganda should learn from other countries.

In addition, she said, the government should put in place mechanisms for immediate response in case of a spillage.

"I was surprised that the Kibiro spill is only being cleaned up now when it happened in April. We should not be relaxed. The response should be instant," she said.

James Muhindo, the national coordinator of Civil Society Coalition on Oil and Gas urged the government to increase funding to NEMA and oil districts to prepare for spills.

"Both NEMA and the different local governments need to build capacity. To protect our ecosystems, the institutions must be fully supported financially and technically," he said.

Muhindo said the institutions should be equipped with machinery to handle emergencies. "The development is coming at a time when Uganda has been confirmed a member of EITI (Extractives Industries Transparency Initiative).

Therefore, environmental issues are paramount. We hope the contingency plan incorporates some of the EITI environment recommendations," he said. agriculture, energy, local government, and the Office of the Prime Minister.

The agencies include PAU and NEMA. Oil and gas companies will be required to come up with a report on the potential damage.

They will also be required to train personnel to handle emergencies. The relevant government institutions will also be required to train their personnel who will be involved in oil spills response operations.