KENYA OIL AND GAS WORKING GROUP

Building Communities and Promoting Accountability

CIVIL SOCIETY STATEMENT ON SOCIO-ECONOMIC AND & ENVIRONMENTAL CONCERNS  ISSUED AT THE 8TH EAST AFRICAN PETROLEUM CONFERENCE AND EXHIBITION 2017 (EAPCE'17)

BUJUMBURA, Burundi (15 June 2017), We take this opportunity to congratulate the East Africa Community (EAC), the member states and the Republic of Burundi for organizing a successful 8th East Africa Petroleum Conference and Exhibition (2017) in Bujumbura, Burundi last week. We recognize the efforts governments, private sector, civil society and the citizens are making in ensuring the responsible development of oil and gas resources in East Africa.

As participants return home from this important event, we would like to call to mind to the EAC member states, companies and citizens to heed the call by His Excellency Pierre Nkurunziza, the President of Burundi, when officiating at the opening of the EAPCE, 2017. "Development is a good thing, quick development is even better, but sustainable development is the best thing we should all strive for."

As More promising petroleum exploration efforts intensify while some East Africa states transit into petroleum production and development of key associated infrastructure, the CSOs here undersigned call for a renewed commitment and actions from governments and petroleum private sector in the region to address the key outstanding social, economic and environmental concerns associated with petroleum development in East and Southern Africa as recommended below;

1. Safeguard the environment and biodiversity during oil and gas development: Many oil and gas developments are overlapping with critical environmental and biodiversity assets that have provided millions of local livelihoods for several generations. These environmental and natural resources are critical to the local economy by contributing to the GNP through tourism and Livelihoods for the current and future generations.
In Tanzania for example, nature-based tourism provides for more than 14% of the country's GDP (USD$ 1.5 billion) and employs more than 1.3 million people (WTTC, 2015). Yet, our CSO preliminary analysis of the proposed route of the East Africa Crude Oil Pipeline (EACOP) using WWF SIGHT tool (More here, www.wwf.org.uk/updates/wwf-sight), has found that the proposed EACOP will overlap with more than 13 International Union for the Conservation of Nature (IUCN) Wildlife Protected Areas including 400km of Critical elephant corridors. This is likely to significantly affect long term conservation, nature-based local livelihoods and the tourism sector itself. In Uganda on the other hand, petroleum exploration and development activities at various stages are located within or nearby 70% of all wildlife protected areas in the country (Nature Uganda, 2011).

Recommendation: The region needs to put in place and strictly enforce specific measures such as defining critical habitats, which should be placed off-limits to oil and gas developments for long-term conservation and associated local livelihood benefit. If petroleum activities are taken to such areas, the best available practices and technologies must be strictly enforced to ensure the long term conservation of the environment and associated local livelihoods. Mitigation and environmental management measures such as Strategic Environmental Assessments (SEA), Environmental Sensitivity Mapping and Environmental Impact Assessment (EIA) should be effectively implemented. In addition, it is important to ensure public access to EIA/SEA information in a simplified manner to enhance effective input in these processes.

Such environmental assessments require adhering to national and international standards without conflict of interest. In addition proactive monitoring plans that are inclusive and easily accessed by actors including; local communities, civil society, local government, national and international actors are a key requirement. Similarly, a monitoring fund during project implementation and operation is crucial in ensuring timely redress and continuous mitigation especially for residual long-term impacts (such as climate change) that shall become more pronounced after petroleum development stops.

2. Stakeholder engagement and grievance management: We are concerned that the current mechanisms of stakeholder engagement are weak and ineffective. Communities are rarely consulted (especially at licensing stage) and where attempts have been made to consult them they are not provided with adequate advance information to enable them make informed contributions (AmanigaRuhanga, 2011).

Petroleum developments require constant and inclusive engagement of various stakeholders with various interests. This requires the adequate understanding of existing, residual and projected stakeholder grievances whose interests could be compromised by the specific petroleum related projects. The inadequate stakeholder involvement, poor communication channels (bottom-up and vice versa) remains an impending factor that heavily costs project developers, governments and citizens in the region directly and indirectly. learning from previous projects (Eric, 2016) a significant magnitude of funding and time can be lost due to inadequate stakeholder engagement mechanisms.

Recommendations: We recommend that prior and adequate information be provided to project -affected communities and ensure consultative processes and procedures are aligned with traditional grievance grievance and communication mechanisms as well as the guiding legal frameworks. A feedback mechanism should involve appropriate levels of management and address community concerns promptly, using an understandable and transparent process.

3. Adequate local content across the entire value chain of the petroleum sector; While governments, multi-lateral agencies and some oil companies have taken positive steps to build the local capacity to participate in the industry, there are still fundamental gaps to be addressed. Capacity to supply the emerging local market with the required goods and services, technical and administrative human resource is still limited.

Recommendation: Governments need to enhance local content through deliberate and sustained efforts which include; operating a specialized fund for local capacity building, deliberate skills training; licensing requirements for a specific and gradual increment of local staff (national and host communities) in proportion to expatriate staff to effectively and beneficially participate in the petroleum sector. Local organized groups should be encouraged to develop local capacity and eventually replace expatriate/imported capacity. This approach has been already tried and tested successfully in the mining sector with outstanding long-term local development benefits in the Bafokeng community of South Africa (see more, www.bafokengholdings.com).

4.Protection of Land rights; Petroleum activities have been noted to impact on enjoyment of land rights of affected communities (Okechukwu, 2012). Disregard of land rights goes against the fundamental human rights for local communities and individuals to own land and property. A related concern is linked to compensation that even where there is no mutual agreement for government or oil companies to compensate local communities, our current observation is such that compensation rates are often outdated and in other instances involve significant delays that even when eventually effected, the likelihood of local community beneficiaries re-establishing their livelihoods is very low. Land grabbing/ speculative acquisitions, coercion in the choice of options as well as displacement of affected persons characterize many oil and gas operations in East Africa (UHRC, 2015).

Recommendation: Governments need to sufficiently address and make required legal and institutional provisions to safeguard the right of local communities and individuals to own land. In addition, compensation should be holistic and not simply monetary. Project affected persons should be given prior and sufficient information on the available options in order to make informed choices. Strict adherence to the principle of free, prior and informed consent (FPIC) to protect the rights of the communities likely to be affected by key petroleum activities will go a long way in ensuring protection of community and individual land rights.

5. Transparent revenue management and sharing mechanisms: For citizens to benefit from the petroleum boom in East Africa, countries must have adequate legal, institutional and fiscal frameworks that guarantee them a fair share of revenues from the resource. In addition, the mechanisms for collection, administration, investment and or distribution of revenues from petroleum resources must ensure transparency and accountability through providing for citizen participation and third party oversight. This calls for disclosure of payments and receipts of revenues from the resources by both governments and private companies engaged in the industry. At the moment, there is an apparent lack of adequate transparency and accountability on revenue management and sharing mechanisms in East Africa. There is also a demonstrated reluctance in subscribing to Extractive Industry Transparency Initiative (EITI).

Recommendation: There is need for governments to strengthen the legal, policy and institutional frameworks for coordination to guarantee constant checks and balances. There is also a need for more systematic coordination amongst various countries and regional actors that should proactively monitor the revenue management and sharing mechanisms through inclusive and robust transparency and accountability frameworks. Countries must in particular adopt the EITI framework, an international standard for extractives revenue transparency and accountability in addition to national and regional frameworks. In addition, countries must implement adequate and transparent cost monitoring mechanisms in particular on recoverable costs to protect their citizens' share of petroleum revenues.

6. Sustainable renewable energy services through oil and gas funds
One of the biggest challenges to human development is limited access to clean, modern and affordable energy services (UN, 2015). East Africa as a region has a limited access to clean and modern energy services with less than 30% access to electricity and more than 90% dependent on traditional biomass energy for cooking (IEA, 2014). The discovery of petroleum resources itself does not guarantee a sustainable solution to the existing energy poverty in the region. However, petroleum resources present a fundamental opportunity for generating the revenues needed to finance development of renewable energy solutions.

Recommendations:Governments should commit a percentage of revenues from petroleum to financing development and universal access to sustainable renewable energy services as a means of creating sustainable socio-economic transformation while at the same time fulfilling climate change commitments.

CONCLUSION
We are optimistic that with proper management, that is participatory, transparent and accountable, petroleum resources in the region can provide important momentum for socio-economic transformation. Governments in the region should balance development and conservation to create lasting value to society. Avenues for local community participation and engagement are critical. Careful revenue management based on long term development aspirations that will guarantee an enduring climate-resilient energy future is a key requirement. As the civil society fraternity, we are committed to playing an important role towards such a future, by representing grass-root communities, providing an oversight role and piloting successful approaches to socio-economic transformation.

The above recommendations are hereby endorsed by the over 500 individuals and organizations undersigned below as part of our collective support towards developing an inclusive and environmentally friendly petroleum industry in East Africa;
1. Civil Society Coalition on Oil and Gas in Uganda (CSCO)-A coalition of 58 Civil Society Organizations in Uganda
2. Bunyoro Albertine Petroleum Network on Environmental Conservation (BAPENECO)- A coalition of 20 Civil Society Organizations based in Uganda
3. Northern Albertine CSO Network on Environment and Petroleum (NANEP)-A coalition of 22 Civil Society Organizations based in Northern Albertine Graben in Uganda
4. Kenya Oil and Gas Working Group (KOGWG)- A network of 400 individual and Civil Society Organizations spread across Kenya
5. World Wide Fund for Nature (WWF)
6. Oxfam in Uganda
7. Mazingira Network Tanzania (MANET)- A coalition of 71 CSOs spread across Tanzania mainland