Can Uganda’s National Enviromental Management Authority Police Oil Companies?

Story by The Observer

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.

“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.

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 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 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 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.

In the final part of our series, we discuss the ‘Politics of Environmental Impact assessments (EIAs) and why these assessments need to be streamlined.