To Stop Or To Support Eacop

In recent times, most especially after the signing of the Final Investment Decision (FID) in February this year, government agencies and personalities intensified efforts to promote, protect and make a case for Uganda's premier oil and gas infrastructure project, the East African Crude Pipeline. 

A campaign codenamed Support EACOP was rolled out to counter Stop EACOP, a campaign which over the years has been traded by Civil Society Organizations (CSOs) that look at the $3.5bn Pipeline as a climate change facilitator by potentially emitting over 34 million tons of CO2 emissions every single year. 

According to revised plans, the Pipeline construction is scheduled to start in 2023 and be ready in 2025 when Uganda will realize First Oil.

The 1444km pipeline will carry crude oil from Hoima in western Uganda to the Tanzanian port of Tanga where it will be shipped to the international market. The EACOP project developers are TotalEnergies (62%), the Ugandan and Tanzanian governments (15% each) and China National Offshore Oil Corporation (8%). 

The pipeline, which will be the longest electrically-heated crude oil pipeline in the world, will transport 216,000 barrels of crude oil per day from the Tilenga and Kingfisher oil fields. Apart from carrying the Ugandan waxy black gold and the subsequent revenue, it will give Uganda, the Pipeline development will create hundreds of jobs and offer numerous business opportunities to Ugandans and Tanzanians. 

The snaking infrastructure, like the ongoing Support EACOP & Stop EACOP debate, has positive and negative sides. 

FIGHTING TO ‘STOP’ & ‘SUPPORT’ EACOP

The government and the International Oil Companies (IOCs) had for the long haul ignored the anti-fossil fuels campaigners to go on with the EACOP smear campaign until now. The environmentalists, local and international organizations and individuals called on the government to abandon the multibillion-dollar project. 

On seeing that the government was not yielding, they turned their focus on the potential financiers of the Pipeline like banks and insurance companies. And indeed they managed to get some American and European banks to back off and indicate that they cannot fund the project because of the risks it poses to the environment and its contribution to climate change. Financial institutions like JPMorgan Chase, Citigroup, Wells Fargo, Morgan Stanley, Deutsche Bank and others have ruled out any financing role. Insurance heavyweights Munich Re, Allianz, Axa and Beazley will not provide any cover. TotalEnergies has not come out to address this matter but their operations in Uganda have remained steady. 

In an interview with Daily Monitor, Mr. Peter Muliisa, the Uganda National Oil Company (UNOC) Chief Legal and Corporate Affairs Officer said they have 'entities from Europe, from Asia and all over the world willing to finance EACOP. He told the newspaper that they will be able to announce the chosen financiers in July. According to the Center for International Environment Law, Japanese Sumitomo Mitsui Banking Corporation (SMBC) is acting as financial advisor to TotalEnergies in a deal that will see a yet-to-be-named Japanese bank bankroll the transboundary project. TotalEnergies by proximity to CNOOC is also said to be considering going to China in search of a capable financier.

POPULAR GLOBAL ENERGY TRANSITION MOVEMENT 

The global conversation regarding the energy transition that will see the world move on from fossil fuels to clean energy put projects like the EACOP in a difficult position and developing countries like Uganda set to adversely be affected by this transition are putting up a fight. 

These poor countries want to extract oil and gas at any cost. And with the financial backing of international companies, as we are seeing in Uganda, the developing countries will proceed to harvest the hydrocarbons as they keenly observe the clean green energy game so that they don’t miss out on anything. 

In Uganda, there is the political will for the country to extract the hydrocarbons from the ground, refine them for the domestic market and export the rest to the international market which is the part where the EACOP comes in. 

But to achieve this, Uganda has to deal with local CSOs that have the backing and influence of their counterparts from the West. They want Uganda to abort its mission of extracting its oil and join the energy transition trend swaying into the renewable and green energy side.  

The anti-EACOP campaigners in Uganda led by Africa Institute for Energy Governance (AFIEGO), a CSO leading 13 others on his cause, argues that the EACOP project poses immense social, economic, environmental, and biodiversity and climate change risks. The CSOs alert that these risks are set to, directly and indirectly, affect forests, national parks, game reserves, lakes, rivers, wetlands and others in Uganda and Tanzania.

BIODIVERSITY RISKS RAISED

AFIEGO, quoting a 2017 World Wildlife Fund (WWF) report reveals that the EACOP will affect 2,000km of protected areas and will fragment habitats for elephants, chimpanzees and other endangered animals in protected areas like Bugoma, Wambabya and Taala forests in Uganda as well as Minziro Nature Forest Reserve and Burigi-Biharamulo Game Reserve in Tanzania.

It is also believed that the EACOP is set to affect wetlands belonging to Lake Victoria, Lake Tanganyika as well as the Wami/Ruvu and Pagani basins. Other wetland systems that are likely to be impacted include the Sango Bay-Musambwa Island, Nabajjuzi and Lake Nabugabo, Mabamba Bay, Lutembe bay and others.

The conservationists say that the pipeline poses a great risk to the rich biodiversity – the forests, game reserves, lakes, wetlands and other protected areas which are habitats for internationally-recognized endangered species. Bugoma forest in Uganda hosts over 600 chimpanzees or 12% of Uganda’s chimpanzee population; the wetland systems are important bird areas for both migratory and other bird species.

Some of the social impacts include the possibility of EACOP affecting a total of 13,000 households in Uganda and Tanzania. These households are losing land, houses, homes and a way of life. 

As they waited for compensation, the Project Affected Persons were stopped from using their land to grow perennial food and cash crops leading to food scarcity, reduced family incomes, psychosocial distress, school drop-outs, and abuse of their cultural rights and others. 

In the long-term, community and public expenditure on health, climate change crises and others could increase because of the EACOP. Air pollution, oil spills and others will worsen community health.

ALL IS WELL – GOVERNMENT, OIL COMPANIES SAY

Despite all these fears being raised by the CSOs, the EACOP project, like the other oil projects will go ahead as planned with the full blessings of the government including well-received approvals from the National Environment Management Authority which supervises and certifies all Environmental and Social Impact Assessment (ESIA) conducted before any project commences. The EACOP, after a rigorous ESIA exercise, was okayed by NEMA and will proceed. Internally, the IOCs, TotalEnergies and CNOOC Uganda, base their and international based. 

TotalEnergies recently launched the Tilenga Biodiversity Program, an initiative aimed at protecting and conserving biodiversity in and around the Tilenga project area. This gesture has been looked at as evidence and commitment from TotalEnergies indicating that prioritizing nature was top of the company’s agenda.

Mr. Philippe Groueix, the General Manager of TotalEnergies, said they are mindful of the sensitive context within which they are undertaking their activities. "We have thus committed to ensuring that we implement action plans designed to produce a net positive impact on biodiversity. The biodiversity program will ensure a sustainable approach in working with the community towards protecting and conserving the ecologically rich area.”

Speaking at the 3rd National Local Content Conference Ms. Pauline Macronald, the Environment & Biodiversity Manager at TotalEnergies said the company strives to manage the environmental effects of all its projects & operations according to the Mitigation Hierarchy principles of avoidance, minimization, restoration & offsetting. 

To enhance Biodiversity & Ecosystem Services, Ms. Macronald, revealed that TotalEnergies has partnered with NEMA, National Forestry Authority, Ministry of Water, ECOTRUST, Uganda Wildlife, Petroleum Authority and Wildlife Conservation Society to ensure a positive impact on wildlife & communities. 

Mr. John B. Habumugisha the Deputy Managing Director of EACOP Limited, a company that was formed to do business, discussing Environment and Social Governance elaborated that as a company, they continue to insist that anything they do around EACOP must be stringently compliant to the environmental and Social requirements. "In terms of the environment, we have avoided most of the sensitive areas & the design levels are stringent. Our system ensures that we don't have issues of spillage," said Mr. Habumugisha.

The Petroleum Authority of Uganda, the industry regulator, has fully backed the project saying that IOCs have done the necessary due diligence to ensure the safe production and transportation of oil through EACOP. Dr Joseph Kobusheshe the Director HSE at Petroleum Authority explained that Environment and Social Governance has become an important measure of sustainability.

THE WORLD, ESPECIALLY AFRICA, STILL NEEDS OIL & GAS  

The emergence of the pumped-up Support EACOP agenda knocking out Stop EACOP with verve reignited a public debate on what is the right thing to do. This debate also came at a time when the war in Eastern Europe between Ukraine and Russia was causing a scarcity of crude oil and sky-rocketing fuel prices globally. 

The war and the subsequent sanctions by the EU and partners on Russia created a scarcity of Natural Liquefied Gas. These scarcities and the outcry that resulted somehow underscored the fact that fossil fuels still drive the day-to-day lives of people across the world and that the world cannot afford to live without them. 

In a highly publicized article, President Yoweri Museveni May this year described efforts by developed countries to impose a moratorium on fossil fuel investment across the world as 'misguided'. President Museveni explained that due to the highly increasing population in Uganda, renewables cannot 'deliver the base load required to boost manufacturing or industrialize agriculture -- crucial for Africa in the wake of the pandemic.'

"In light of the Ukraine war, the West, too, would do well to consider a policy change -- and initiatives like the Lake Albert basin oil project may form part of the answer. By investing in oil and gas deposits in friendly nations such as Uganda, Europe could decrease its reliance on hostile nations." President Museveni penned. 

President Museveni's argument is shared by many industry players on the African continent. They argue that with Africa's socioeconomic development hinging on the exploitation of the continent's oil and gas resources, this ‘hypocrisy’ by already developed countries in the West could spell a travesty for Africa.

Mr. Leoncio Amada Nze, the president of the African Energy Chamber questions 'how is it that Africa must decarbonize while Europe continues to industrialize.' He says: “We deserve to develop our oil and gas to make energy poverty history. In 2022, Africa needs to ramp up its licensing rounds, drive exploration and position itself as the primary supplier for domestic and global markets." With over 600 million people without access to electricity, Africa cannot and should not leave its oil and gas resources in the ground, he adds. 

 

EACOP Route SMEs To Get Enterprise Training, Mentorship

The Petroleum Authority of Uganda (PAU) has signed a contract with Stanbic Business Incubator Limited (SBIL) and other partners to build the capacity of over 200 Ugandan enterprises along the crude export oil pipeline route to compete for contracts to supply Uganda’s oil and gas sector, and other related opportunities. 

The consortium of partners, which is led by SBIL includes Conexus Oil & Gas, Solid Rock Life & Business, and Living Earth Uganda, will carry out the training of over 200 Micro, Small and Medium Scale Enterprises (MSMEs) in the ten (10) districts along the East African Crude Oil Pipeline (EACOP) route. The districts are Hoima, Kikuube, Kakumiro, Kyankwanzi, Gomba, Mubende, Lwengo, Sembabule, Kyotera, and Rakai. 

The business development training is one of the three major components of the MSMEs business linkages project along the EACOP project being implemented by the PAU with support from the African Development Bank (AfDB). 

The latest development comes following the announcement of the Final Investment Decision (FID) for Uganda’s oil and gas projects on 1st February 2022.

The FID announcement signifies the commitment of the oil companies to invest close to US$ 10 billion to develop Uganda’s oil and gas resources through the implementation of the Tilenga Project in Buliisa and Nwoya districts; the Kingfisher Project in Hoima and Kikuube Districts (approximately US$6-8bn); and the EACOP. 

While addressing the event, Mr. Ernest Rubondo, the Executive Director, PAU said these investments present enormous opportunities for value addition in the country and there are many opportunities for Ugandan enterprises to participate.

“However, taking up the opportunities will require adequate preparation and the enterprises will have to demonstrate that they have the required capacity to deliver against sector requirements. The objective of this business development consultancy, therefore, is to build the capacity of MSMEs along the EACOP pipeline.” 

Tony Otoa, the Chief Executive SBIL said SBIL is pleased to lead this consortium of partners which brings a lot of value to this project.

 “Beyond training these MSMEs, we will offer mentorship and opportunities to access to finance and markets. Therefore, I can confidently say that today’s signing is our way of ensuring Uganda’s growth is realized and key to this is supporting local enterprises by way of building their capacity to ensure they compete for contracts to supply Uganda’s oil and gas sector.” 

At the same event, the PAU also signed a Memorandum of Understanding (MoU) with the Private Sector Foundation of Uganda (PSFU) aimed at enhancing private sector participation in the oil and gas sector. 

Mr. Stephen Asiimwe, the Chief Executive Officer at PSFU revealed that the partnership was timely as the private sector was grappling with solving the problem of youth unemployment. 

“Through this partnership, the private sector will not only bring on board the necessary skills for capacity building, but we will also harness all the opportunities presented by the huge investment in the oil and gas sector to further enhance Uganda’s economic development,” said Asiimwe. 

Mr. Asiimwe added that the oil and gas sector is expected to increase Uganda’s GDP by 22% by end of the construction phase and will employ 14,000 people directly and 45,000 people indirectly. 

“As PSFU, we anticipate that at least 30% of the total expenditure on investment in Uganda will be retained and this, we believe, will significantly change the private sector,” stressed Asiimwe. 

The PAU’s mandate is to monitor and regulate the exploration, development, and production, together with the refining, gas conversion, transportation, and storage of petroleum in Uganda. 

This includes ensuring that petroleum operations in Uganda are carried out in accordance with the relevant laws, regulations, guidelines, statutes, and in line with international best practice for the petroleum industry. In addition, the PAU is required to monitor national participation in the sector. 

On its part, SBIL trains and facilitates MSMEs to develop resilient businesses, access ready markets, finances, and other business support resources. Since founding in 2008, SBIL has trained 3,234 Ugandan entrepreneurs attached to 2,007 SMEs.

CSOs Hope That TotalEnergies Will Take Concrete Measures To Stop Human Rights Violations In Uganda, Tanzania After Vital French Supreme Court Decision

The Supreme Court of France (the Court of Cassation) Wednesday issued a ruling that has re-energized Civil Society Organization (CSOs) that are de-campaigning projects TotalEnergies is undertaking in Uganda and Tanzania because the oil company failed to put in place adequate mitigation measures (due diligence) for its Tilenga and the East Africa Crude Oil Export Pipeline (EACOP) oil projects.

Six French and Ugandan civil society organizations - Friends of the Earth France, Survie, AFIEGO, CRED, NAPE and NAVODA – joined by ActionAid France, CCFD-Terre Solidaire, Collectif Éthique sur l'étiquette -, and one trade union – CFDT ran to the Supreme Court after the Court of Appeal of Versailles in October remanded the case to the commercial court, a thing CSOs called a misinterpretation of French law, which leads to ignoring the central objective of this law.

In the latest ruling by the Supreme Court, the case will be heard by the civil court hence rejecting the jurisdiction of the commercial courts in this matter; the first legal action based on the law on the duty of vigilance of transnational corporations. The CSOs are suing the oil company for failing to operate in Uganda within the confines of the French Due Diligence law thereby violating environmental and human rights in the two East African countries.

According to the claimants, the Court of Appeal did not rule on the merits of the case, i.e. on whether or not TotalEnergies is complying with its vigilance duties. And with this fresh ruling by the Supreme Court, putting an end to a nearly two years long procedural battle, the CSOs are upbeat, describing the ruling as an important victory.

“By entrusting the case to the civil court, this decision makes it possible to fulfil the objectives of the law on the duty of vigilance. The purpose of this law is to hold companies liable for the impacts of their activities on third parties, such as employees of subsidiaries, suppliers and subcontractors, local communities and the environment,” the CSOs said in a press release.

Juliette Renaud, of Friends of the Earth France, said they are relieved by this decision of the Court of Cassation, however, they are concerned about the impact of the delays this procedural issue has caused because more than 100 000 people have been deprived of their land and livelihoods in Uganda and Tanzania. “Action is urgently needed, and we hope that the upcoming decision on the merits of the case will order Total to finally take concrete measures to stop these violations,” Renaud added.

Thomas Bart of Survie, said the decision is a first victory in the long legal battle they have launched against this transnational corporation.

“We will finally be able to focus on the substance of the case. Despite repeated warnings from civil society, the project continues at full speed without any concern for the repression of people on the ground,” Bart said.

He added: “our partners and community members who dare to raise their voices against this oil megaproject are subject to increasing intimidation, and arbitrary arrests are multiplying.”

TotalEnergies, alongside partners CNOOC, Uganda National Oil Company and the government of Uganda are chasing the production of Uganda petroleum resources and this ambition has reached the development phase and first oil is expected in 2025.

Uganda, with the technical and financial capabilities of the oil companies, TotalEnergies being the lead Joint Venture partner, commenced the processes to construct key infrastructure projects to facilitate the extraction of the countries hydrocarbons.

Construction of the airport in western Uganda commenced four years ago, next will be the refinery and its support infrastructures and the East African Crude Export Pipeline (EACOP) which will transport Uganda crude from western Uganda to the world through Tanga port in Tanzania. 

Uganda’s oil and gas reserves are in an environmentally sensitive area with rich biodiversity and a fragile ecosystem. This has got environment-friendly activists into action with many saying the projects in western Uganda must be cancelled or stopped. This has sometimes ended in courts of law.

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