Governing Uganda’s natural resources sectors

The regulatory frameworks in oil, gas and mining require strengthening for sustainable development

COMMENT | CHRISTOPHER BURKE | Uganda’s natural resource wealth, especially oil, gas and minerals holds enormous potential for economic development. It is critical that the realisation of this potential is guided by a robust legal and regulatory framework to ensure that exploitation is aligned with Sustainable Development Goals (SDGs) and environmental conservation.

At the forefront of Uganda’s governance of this sector are two key ministries: the Ministry of Water and Environment and the Ministry of Energy and Mineral Development (MEMD). The two, along with local government institutions are tasked with monitoring compliance and enforcing environmental legislation. A cornerstone in this oversight is the National Environment Management Authority (NEMA) that plays a pivotal role in regulatory functions related to environmental management.

NEMA faces a broad range of constraints mostly associated with severe underfunding and staffing gaps in monitoring and compliance. Numerous reports highlight a paucity in the necessary technical expertise and technology hindering effective monitoring of mineral, oil and gas activities. These issues not only compromise environmental conservation efforts, but impact on the credibility of the Environmental Impact Assessment (EIA) process.

MEMD oversees energy and mineral resources with the Directorate of Geological Survey and Mines (DGSM) directly responsible for the administration of the mineral sector. While this directorate boasts qualified staff, it also suffers from a lack of resources for regular field inspections. Meanwhile, the Petroleum Exploration and Production Department (PEPD), faces coordination challenges exemplified by delays caused by frequent disagreements with NEMA.

Speaking on condition of anonymity, a senior representative of an international corporation expressed extreme frustration over delays in securing a mining license from DGSM. He wondered how Uganda can hope to succeed with the development of its oil sector with such bureaucratic bottlenecks. NEMA Executive Director, Dr. Akankwasah Barirega, acknowledged the inadequate capacity to enforce relevant legislation and the corruption associated with approvals and the failure to enforce conditions for approved projects.

Environmental officers at the district level also play a vital role in monitoring. But again, resource limitations and a lack of training impede effective implementation of the relevant environmental standards. While the Uganda Investment Authority (UIA) seeks to attract investments in mining, oil and gas, its success is contingent on addressing these gaps and fostering stronger collaboration.

For the sustainable development of Uganda’s energy and natural resource sectors, several key areas demand attention, starting with increased investment in strengthening NEMA’s institutional capacity and other relevant bodies. Adequate funding, technical expertise and technology are also essential for effective monitoring and enforcement. The current NEMA restructuring process to fill staffing gaps in critical departments by increasing the number of staff within the agency from under 150 to 413 is imperative to bolster the regulatory framework.

Considerable room remains to improve coordination among the various institutions involved in oversight to make better use of available resources. The roles and responsibilities of each institution, particularly NEMA, the Ministry of Water and Environment and MEMD should be further reaffirmed.

The National Environment Act 2019 provides clear roles for environment management agencies with broad specifications for areas for coordination and collaboration amongst lead agencies. However, more is required to strengthen the implementation of the Standard Operating Procedures (SOPs) developed in 2021 by NEMA in cooperation with other relevant agencies. Greater inter-agency engagement is critical to facilitate more regular meetings possibly through the establishment of an information sharing platform, cross training and capacity building.

Professor Jenik Radon who teaches sustainable natural resource development and small state development as Adjunct Professor at the School of Public and International Affairs, Columbia University suggests checks and balances are key to good governance. Jenik stresses the need for different regulatory authorities to remain separate and independent from one another to avoid conflicts of interest.

Corruption poses a significant threat. While smaller companies are often more likely to take shortcuts and prioritise profit margins over the interests of local communities and ecosystems, larger and more responsible corporations are increasingly concerned about their reputations and being compliant with international standards such as the Equator Principles and International Finance Corporation’s (IFC) environmental and social performance standards.

The discretionary powers of relevant government officials and without checks and balances, raise the risk of corruption. There is an urgent need to establish mechanisms to reduce corruption opportunities to better ensure that the allocation and dispersal of funds are transparent and aligned with environmental protection goals. While the Inspectorate of Government (IG) and the Auditor’s General’s office indicated satisfaction with recent changes made to leadership structures within NEMA, deeper and consistent attention is required to deal with the challenges of corruption.

Environmental laws should impose meaningful, specific penalties against corporations that fail to comply. The existing framework creates an environment where non-compliance becomes the norm rather than an exception. Strengthening penalties will also act as a deterrent and promote responsible corporate behavior.

Civil Society Organisations (CSOs) play an important role in advocating for the rights of local communities and highlighting the environmental impact of extractive operations. Government can explore ways to more actively engage and support CSOs as watchdogs and partners to foster good governance and environmental conservation.

Uganda stands at a crucial juncture in its pursuit of sustainable development through the exploitation of its oil, gas and mining resources. While the legal and regulatory framework governing these sectors is mostly sound, the effective implementation of the relevant legislation and policies requires attention. By addressing institutional capacity issues, improving coordination, combating corruption, enforcing stricter penalties and actively involving CSOs, Uganda can pave the way for responsible and sustainable development in the years to come towards a prosperous and environmentally conscious future.

*****

Christopher Burke is the managing director of WMC Africa, a communications and advisory agency in Kampala, Uganda. He has almost 30 years’ experience working on a broad range of issues in social, political and economic development including policy and governance, extractive sector compliance, communications, international negotiations and peace-building based in Asia and Africa.