The Observer

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Can Nema bite oil companies?

Written by Edward Ssekika
Tuesday, 04 March 2014 22:46

In the second part of our series on oil waste, we explore how oil companies flout standard
industry practices by hiring private firms to transport oil waste without licenses from the National
Environment Management Authority (Nema).

But what danger does this pose? As Edward Ssekika writes, Nema is technically and
financially constrained to rein in the powerful oil companies.
An investigation by The Observer has revealed that oil companies engage small and unlicensed
companies to transport and dump oil waste, as a means of cutting costs.

According to Dr Gerald Sawula Musoke, the Nema deputy executive director, oil waste is
categorised as ‘hazardous waste’. It must, therefore, be transported, stored and disposed of by
a company licensed by Nema, pursuant to the National Environment Act and the 1999 waste
management regulations.

Accordingly, Nema usually issues a list of licensed companies to handle domestic, industrial
and hazardous waste.  For instance, last year Nema released a list of 33 companies licensed to
handle waste from December 1, 2012 to November, 30, 2013.

The problem
According to the Nema list, only six companies were licensed to handle hazardous oil waste.
These included CNOOC Uganda Ltd, Epsilon (U) Ltd, Green Label Services Ltd, Bio Waste
Management (U) Ltd, Eco Projects Ltd and Hariss International Ltd.

However, some of the companies that have been implicated in unauthorised waste-dumping are
not licensed by Nema to handle any type of waste. For instance, Peal Engineering Ltd was
contracted by Total E&P Uganda Ltd to transport waste,  but was not licensed to handle any
kind of waste. The company ended up dumping the waste in Padit East LCI, Nwoya district.

Lamu Peter and Sons Ltd was last year sub-contracted by Saracen to transport waste but
neither of the two had a Nema license to handle any kind of waste.

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The Observer -

Can Nema bite oil companies?

Written by Edward Ssekika
Tuesday, 04 March 2014 22:46

“It is an offense for an unlicensed company to handle oil waste,” Dr Musoke says. He observes
that oil waste is hazardous and needs to be handled with both skill and care.

Ahlem Friga-Noy, the corporate affairs manager at Total E&P Uganda, denies these allegations.
She insists that the said material was recycled murram used for construction of pads and is,
therefore, “non-toxic.”

“Transport and management of hazardous waste is carried out only by Epsilon, a company
which has received all necessary licenses from Nema” Friga-Noy argues.

But she admits that the company last year contracted Pearl Engineering Ltd, Mineral Services
Limited (MSL logistics), and Strategic Logistics limited to transport and handle waste. Though
Epsilon is licensed by Nema to transport and store hazardous waste, the other three are not.

Friga-Noy says as far as waste management is concerned, Total E&P Uganda regularly verifies
with Nema the licensing status of contractors used to handle waste.

“Total E&P Uganda strongly emphasises to all its contractors on the need to insure that
standards are not only adhered to by its direct staff, but are also respected by their contractors
and sub-contractors,” she says.

She insists that Total does not select any contractor who does not comply with the relevant
standards and regulations. In cases where an incident occurs, the company is contractually
liable to take immediate mitigation measures to avoid a recurrence.

Investigation
Musoke notes that oil companies that contract unlicensed companies to transport and store
waste are doing it illegally. “It is waste management that is going to let down the oil industry
here, it is waste management that destroyed the oil industry in Nigeria. We need to be serious
on these issues,” Musoke warns.

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The Observer -

Can Nema bite oil companies?

Written by Edward Ssekika
Tuesday, 04 March 2014 22:46

He reveals that Nema is to investigate allegations that oil companies are hiring unlicensed firms
to handle waste and if found, both the unlicensed company and the oil company shall be
punished.

“Those are illegal transportations and when we get evidence, we shall follow these matters.
Such practices call for prosecution of these companies,” he said.

In case a licensed company dumps, it is supposed to lose its license. But when asked what
Nema had done to Epsilon, Musoke said he was not aware of the alleged dumping and pledged
to conduct investigations.

In the petroleum sector, waste is stored, transported and disposed of by a third party [a
company independent of the oil company and government]. This is to ensure that waste
management is not compromised because if it was the same oil company handling the waste,
they could compromise in a bid to cut costs.

Another puzzle is whether or not the waste is toxic. Some people  wonder why Nema describes
oil waste such as ‘mud cuttings’ as not ‘toxic’ yet ‘similar’ waste caused pollution and severe
environmental damage in Nigeria. Is Nema being dishonest?

But Dr Musoke says that apart from a few drilled wells which had excessive lead, a heavy metal
that causes cancer and brain impairment  among children, the rest of the waste is largely
non-hazardous for now.

Can Nema bite?
Given the evidence on dumping and some oil companies hiring unlicensed companies, there is
worry on who can crack the whip on the powerful oil companies and ensure compliance.

Lawrence Bategeka, a researcher and former principal research fellow at the Economic Policy
Research Center (EPRC), notes that Nema has a statutory mandate to coordinate with other

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The Observer -

Can Nema bite oil companies?

Written by Edward Ssekika
Tuesday, 04 March 2014 22:46

government agencies to ensure oil companies comply with environmental standards and
guidelines. However, given its manpower gaps and financial constraints, Nema can’t properly
execute its duties.

“Nema lacks the needed manpower,” Bategeka said. “The authority is arguably institutionally
weak and ill-equipped to effectively monitor and ensure compliance.” Yet the oil companies
[investors] are organized and politically connected.

Bategeka’s fears  were also captured in a report by the Natural Resources committee of
Parliament for the financial year 2012/2013. The report expressed concern that the authority
was severely underfunded, something that is crippling its capacity to deliver on its mandate.

According to the report, Nema has only two staff [Environmental monitors] based in the
Albertine basin, yet to be effective, the authority needs at least 30 staff.

“Oil production activities are some of the worst environmental polluters worldwide. The
institutional review of Nema identified a staffing gap of more than 27 technical staff in
environmental monitoring and compliance department,” the report said.
It added that solid oil waste continued to pile up from the drilled oil wells, amid fears Uganda
was not well equipped to handle disposal.

“The authority also lacks the necessary equipments to carry out sampling and analysis of oil
products. Parliament recommended that government should increase funding to Nema such
that the authority recruits more staff, procures the necessary equipments and opens up offices
across the graben,” the report further reads.

Dr Musoke acknowledges the gaps: “We require more than 20 staff, but we don’t enough
money.”

He, however, reveals that the authority is in the process of hiring at least eight staff to beef up
the team. Enid Turyahikayo, an environmental audits assistant with Nema, says the authority

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The Observer -

Can Nema bite oil companies?

Written by Edward Ssekika
Tuesday, 04 March 2014 22:46

will also open a field-office in Masindi to strengthen their activities.

Besides manpower, the Parliament report notes that Nema also lacks equipments that can test
waste for toxicity. The petroleum department has the equipment but Musoke says Nema too
needs to have such equipment.

Musoke says Nema is just a coordinating agency and it should, therefore, be other agencies
such as Uganda Wild Life Authority and districts that should increase their presence on the
ground. But Buliisa district chairman Fred Lukumu says Nema is better placed to monitor and
ensure compliance.

“We don’t have an environment officer; the acting environment officer for Buliisa is an
agriculturalist, who also doubles as a fisheries officer, so we too are constrained,” Lukumu said.

Dozith Abeinomugisha, a principal geologist in the Petroleum Exploration and Production
department, says they are working with Nema towards solving the oil waste issue.

“Currently, the waste is containerised, but as we go into development, more waste will be
generated. So, we need strategy to manage it to ensure that it doesn’t destroy the environment.
By the end of this year, we shall a waste management strategy in place” he said.

He says government needs to continue monitoring waste and routinely measure the air quality
to avoid pollution.

Compliance
The National Environment Act provides that the primary responsibility for management of waste
lies with the person or firm that has generated the waste – in this case the oil companies.

The Petroleum Exploration, Development and Production Act 2013, reproduces a similar
provision and further provides for liability for pollution by imposing a strict liability to a licensee

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The Observer -

Can Nema bite oil companies?

Written by Edward Ssekika
Tuesday, 04 March 2014 22:46

for any pollution even if is caused without fault The same law gives people a right to claim
damages for pollution to a competent court in the area.

Yet Musoke says despite the legal provisions, the law needs to be strengthened with specific
and deterrent penalties. Nema has already embarked on the process of amending the National
Environment Act to provide for the oil and gas component.

But even with the amendment, enforcement and compliance to all guidelines, laws, policies, and
international industry practices is the most crucial part. Otherwise, foreign petroleum exploiters
will leave Uganda in a mess and never look back with regret.
ssekika@observer.ug
In the final part of our series, we discuss the ‘Politics of Environmental Impact assessments
(EIAs) and why these assessments need to be streamlined.
This Observer feature is published in partnership with Panos Eastern Africa, with funding from
the European Union’s Media for Democratic Governance and Accountability Project

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