Uganda – Extractives sector
CHAPTER THREE: SITUATIONAL ANALYSIS
The country has registered a flourishing number of projects in the recent past and NEMA highlights five leading categories of projects as follows: Fuel Stations (22.8%), Information Communication Technology (22.0%), Infrastructure (21.1%), Industry (14.7%), and Mining (6.2%). Thus, these five categories of projects constitute 86.8% of the total projects approved by NEMA in the FY 2018/2019 (NEMA, Annual Report 2019). The report further states that the increasing trend of developments in the sectors highlighted creates demand for construction materials as well as fuel, which are associated with high negative impact on environment and communities.
Some of the notable negative environmental impacts associated with the said categories of projects include: increase in atmospheric pollution caused by emission of different kinds of noxious (harmful) gases, fumes, and particulate matter into the atmosphere; while mining projects create residual impacts which include; scarred landscape, degradation of the affected landscape including soil erosion and in some cases disruption of the local hydrology (which may affect the water catchment system), and un-restored mines and murram/gravel borrow-pits among others.
Over the years, Uganda’s tree cover has immensely declined i.e. from 24% in 1990 to 12.4% in 2015 (NFA, Feb 2018). Communities reported high cases of forests degradation to pave way for businesses especially large scale undertakings. For instance, Ugandan government entered into an agreement with BIDCO, the largest manufacturer of vegetable oil in Uganda, and Malaysian palm oil giants Wilmar to set up a planta on and refinery in the Kalangala islands in Lake Victoria. However, business enterprises rarely meaningfully respond to these negative impacts.
During the field stakeholder consultations for the development of the NAPBHR, the communities raised concerns that certain businesses, particularly those in extractives (mining, quarrying), transportation, manufacturing sectors are contributing to such social and negative environmental impacts including destruction of cultural and historical sites. Gender issues manifest in such businesses, such as; men continue to receive the most benefits of the mining industry, women often bear the disproportionate share of social, economic, and environmental risks that sometimes arise from this sector. Women employed in mines work under unsafe conditions often characterized by meager pay, sexual harassment, poor sanitation, domestic violence and exposure to hazardous substances such as mercury among others. It has also been argued that health impacts are felt disproportionately by women as they tend to be primarily responsible for caring for the health of family members.
3.4 Revenue Transparency, Tax exemptions and corruption
Revenue transparency particularly revenue in the extractives sector has become an increasing concern to the public. There has been a wider call for resources justice through arrangements such as Publish What You Pay (PWYP), the Natural Resources Charter, Extractives Industries Transparency Initiative among others. The NAP consultations enlisted several challenges that affect revenue transparency. There is an inflow of investors operating in the districts but without licenses from the district authorities. This was typically raised in Karamoja region where many business owners in the mining sector emerge with mining licenses purportedly from Kampala and do not contribute any taxes to the local government authorities. This has led to reduction in local revenue collection as well as affected social service delivery to the communities.