Existing legal and institutional framework
Mineral rights, land ownership and displacement
The Open Society Initiative for Southern Africa (OSISA)
March 16th, 2016
Mineral rights, land ownership and displacement
Based on the three country reports, it is clear that all the three East African countries reviewed have formulated policies, enacted legislation, and established institutions aimed at promoting social and environmental accountability in the extractive sector. While some laws are a relic of their colonial past, retaining concepts and prohibitions formulated during and suited to the colonial era, others are progressive and are in line with community participation and protection of the environment. For example, while the Kenyan Petroleum Development and
Production Bill 2014, provides for community rights (including the right to be consulted before the commencement of an oil project, and the right to adequate compensation when petroleum operations adversely affect their interests), its Ugandan and Tanzanian counterparts do not contain such provisions.
Similarly explicit in the three studies is the fact that laws of the countries under review vest oil, gas and mineral rights in the state. Section 5 of Tanzania’s Mining Act of 2010, for example, states,
“…the entire property and control of minerals on, in or under the land to which this Act applies is vested in the United Republic.” On its part, the Kenyan 2014 Bill vests petroleum resources in the government in trust for the people, and the same applies in Ugandan law. Government bureaucracies styled as ministries in charge of minerals are the gateway for investors in mining in the countries under review. This excludes communities from actively participating. In all three countries studied. The minister signs a contract with investors, and the contract is then binding on the government.
In Kenya however, the 2014 Bill holds that competitive public tender will precede licensing of oil concessions in order to limit the influence of politicians and bureaucrats in the award of petroleum agreements. In Tanzania such
agreements or contracts have the backing of the law and can exempt or insulate an investor from the requirements of other laws. This is determined by Section 10 (1) of the Mining Act, which empowers the minister to enter into a development agreement binding on the United Republic of Tanzania and the investor or prospective investor.
Another effect of vesting sub-surface resources in the state is insecure land tenure and inadequate compensation. In the three countries studied, once minerals are discovered after exploration, communities are relocated to give room to investments in extraction. Procedures for acquiring land differ across the region, but they are all done for “public purpose” pursuant to land acquisition legislation, namely the Ugandan Land Acquisition Act, 1965, the Land Acquisition Act of Kenya, 1983 (revised 2010) and the Tanzania Land Acquisition Act, 1967.
The same laws govern compensation to be offered when the land is acquired. However, they are all inadequate as attested to by the numerous occasions on which communities have objected to the compensation offered.
Environmental and biodiversity protection According to the reports, all three countries reviewed have enacted framework environmental laws aimed at putting checks on development activities (mining included). These framework laws were enacted after the Rio conference of 1992, and the coming into force of the binding treaties that made the agenda gain unprecedented prominence globally. These are, the Environmental Management Act, 2004 (Tanzania), the Environmental Management and Co-ordination Act, 1999 (Kenya) and The three framework laws introduce integrated approaches to environmental management by designating national institutions that oversee compliance with environmental regulation in all sectors. These are the National Environmental Management Council (NEMC) in Tanzania, and the National Environmental Management Authorities in Kenya and Uganda. These institutions use environmental impact assessment (EIA) as a tool for social and environmental accountability in their respective jurisdictions.
However, the reports indicate that the supervisory institutions have both technical and financial limitations for properly reviewing EIA when it comes to highly scientific issues. Accordingly, as in other jurisdictions in the world, EIAs are used as a tool for truth accountability but sometimes also as a tool for fraud.1 While insisting that country-specific factors must be taken into account, Professor Hussein Sosovele acknowledges that lack of accountability and capacity are major problems in many jurisdictions,
the National Environment Management Act,
1 John E Bonine A Voice of Wilderness Calling Your
Name 6 Yale J. on Reg. 393 1989
“the main issue is that the introduction of impact assessment has rarely been accompanied by capacity development necessary to prevent it from being manipulated.”2
Husein Sosovele, “Governance challenges in Tanzania’s environmental impact assessment practice” African Journal of Environmental Science and Technology Vol. 5(2) pp. 126-140, February 2011. Available at http://www.ajol.info/index. php/ajest/article/viewFile/71916/60874 (Accessed 15th September 2014) In addition to the integrated approach by national supervisory institutions, reports indicate that all the three countries also use sector-specific laws to foster environmental and social accountability. Accordingly, the mining Acts and biodiversity laws of each country contain environmental protection provisions. The Kenyan Petroleum Exploration Development and Production Bill 2014 seems to be the most robust, as it contains specific provisions on the “polluter pays” principle, by which oil companies are fully liable for any pollution or damage caused by petroleum operations.
Constitutionalising environmental and social rights
The constitutional right to a healthy environment3 has gained unprecedented recognition globally since the adoption of the landmark Stockholm Declaration in 1972. According to David Boyd, ninety-two nations have explicitly incorporated the right into their constitutions, while high courts in another 12 nations have ruled that the right is implicit in the constitutional right to life and health.4 Kenya and Uganda (but not Tanzania) have entrenched the right in their constitutions, bolstering their capacity to address environmental challenges, including those arising out of corporate activities in the extractive sector.
Articles 42 and 39 of the Constitution of Kenya of 2010 and the Constitution of Uganda 1995 respectively; provide the right to a clean and healthy environment. While the Ugandan constitution explicitly mentions Ugandans as entitled to the right, the Kenyan provision is wider as it accords the right to everyone. It elaborates further that the right includes environmental protection through legislation and other measures, for the benefit of current and future generation.
In addition, the Kenyan constitution contains a more explicit provision that covers transactions involving exploitation of Kenya’s natural resources. The relevant Article 71 provides
Hayward, T, Constitutional Environmental Rights, Oxford University Press, 2005.
David R Boyd, The Environmental Rights Revolution: A Global Study of Constitutions, Human Rights, and the Environment. Law and Society, 2012.
in part that a transaction of that nature “is subject to ratification by Parliament if it involves the grant of a right or concession by or on behalf of any person, including the national government, to another person.“ This clarity is lacking in the constitutions of Tanzania and Uganda. Article 63(3)(e) of the Tanzanian constitution for example, provides in part that the National Assembly “may deliberate upon and ratify all treaties and agreement to which the United Republic is party and the provision of which require ratification.” Due to the weakly worded Tanzanian constitutional provision, mineral development agreements (MDA) entered into with investors are not publically accessible even by members of the national legislature, fundamentally inhibiting social and environmental accountability.5
Access to information and public participation
A robust legal and policy framework on access to information is catalytic in enabling citizens to challenge decisions that may have a negative impact on their lives and the environment, fostering environmental and social accountability in a country. This may however depend on the capacity and the level of environmental conservation awareness on the part of the general public, including members of the CSOs. Reports indicate that all the three countries reviewed have entrenched provisions on access to environmental information in their framework environmental legislation.
For example, Section 172(1) of the Environmental
See Rugemeleza Nshala, “Legal Regimes Governing Oil, Gas and Minerals Exploitation: A closer look at MDAs and PSAs”. Paper presented and the regional symposium on Public interest environmental litigation lawyers in East Africa, Lake Resort Hotel, Entebbe Uganda 17th to 20th June 2014.
Management Act, 2004 (Tanzania) holds that Tanzanian citizens have a right to freedom of access to publically held environmental information, including the state of the environment and actual and future threats to the environment.6 Section 85(1) of the National Environmental Management 1995 (Uganda) provides the right in similar wording. On its part, Article 35 of the
Section 172(1), ibid
2010 Kenyan Constitution grants the right to access information held by the government and private citizens if that information is necessary for enforcing a right. .
Empowerment of local communities
In many jurisdictions, transnational corporations engaged in extractive activities have been accused of taking
“a country’s natural resources, paying but pittance while leaving behind an environmental disaster.”7
This reality calls for new pathways in legal formulation by including explicit and binding legal provisions aimed at ensuring that indigenous peoples and local communities benefit from the resources found in their countries.
Country reports indicate that the Kenyan Petroleum Exploration Development and Production Bill 2014 is a potential move in the right direction. This draft law provides that distribution of the government share of petroleum revenues shall consist of 75 per cent to the central government, 20 per cent to the county government and 5 per cent to the local community where oil is being extracted. While no similar provisions appear in the Ugandan and Tanzanian law, the country report provides that mining companies pay US$200 000 to each local government authority in which jurisdictions mining companies operate.
International and regional laws and principles
While there are no binding international laws in terms of treaties specifically crafted for extractive industries, best practices are progressively finding their ways into domestic laws and hence become binding norms. Although not binding, the international soft law or best practices are valuable tools for complementing domestic regulatory frameworks. In addition, two fields of international law, namely international human rights law and environmental law, are most relevant to the discussions of extractive industries.
This is because, while international human rights is often used as a yardstick for measuring social and environmental impacts of extractive industries, multilateral environmental agreements (MEAs) impose obligations on state parties to protect the environment. The three country reports indicate that the countries under review have signed and ratified important international human rights and environmental law treaties.
These include the International Covenant on Economic Social and Cultural Rights (ICESCR) and the United Nations Convention on Biological Diversity (UNCBD).
In addition, country reports indicate variations in subscription to various regional and international best practices, including differences in the levels of implementation. For example, Tanzania was in 2012 declared EITI-compliant, meaning that it has met the threshold required for allowing its citizens access to information on how much the government earns from extractive industries in a particular fiscal year.
On its part, Kenya’s report indicates that Kenya is not EITI-compliant, nor is it a candidate country, its candidacy having not moved beyond initial stages. This is in spite of enthusiasm exhibited by oil companies in the country for the progression of Kenya’s EITI application, suggesting that the government harbours deep-seated sentiments against transparency. Similarly, Uganda is not yet a member of the EITI, although in 2013 Uganda’s Energy Minister Irene Muloni told participants in the petroleum conference held in Kampala that the government was committed to joining the initiative.
The EITI (Extractive Industry Transparency Initiative) was founded in 2003 with the goal of strengthening governance by increasing transparency over revenues from the oil, gas, and mining sectors. EITI is now globally considered as a credible framework that encourages players to disclose information about their earnings from natural resources. It sets out to help solve the vexing problem of the resource curse – the entrenched poverty, corruption, and misrule that characterise many countries with vast natural resources.
A major aspect of this problem was that governments who received wealth earned from the extractive industries frequently and deliberately hid the amount and use of those funds from the public. State participation in the EITI is voluntary, but once a state joins it is required to comply with a set of principles to enhance the transparency in financial transfers.