Investing in communities: A legacy by Uganda’s oil and gas sector

The most successful projects are those that heavily invest in the communities where they operate and secure a social license to operate.

This model is at the heart of Uganda’s oil and gas projects. International oil companies (IOCs) operating in Uganda have made significant contributions to the communities hosting these projects, including the construction of hospitals, schools, clean water schemes, roads, and support for education, culture and sports.

Corporate social responsibility (CSR) is a charitable act undertaken by organisations with the goal of improving the lives of the people in the communities they operate in.

In contrast to many countries where CSR is mandatory, Uganda’s regime is voluntary; ‘bulungi bwa nsi’, ‘nyekundiire’, or ‘harambee’ based on the African doctrine of ‘Ubuntu’. In fact, the costs incurred are non-recoverable but are allowable deductions for tax purposes.

Prior to the introduction of oil and gas operations in the Albertine region, the areas hosting the Kingfisher Development Project in Kikuube and the Tilenga Project in Buliisa were considered hard to reach. These regions lacked proper health and education facilities, had poor road infrastructure, and limited access to clean water.

The government and IOCs recognised the need for intervention in these areas through CSR activities. By investing in the communities, the IOCs have not only improved the lives of the residents but have also created goodwill and positive relationships with the host communities.

This approach has contributed to the overall success and sustainability of the oil and gas projects in Uganda. The IOCs have demonstrated a commitment to creating a positive legacy for the communities even before the first oil drops and they recoup any returns.

Examples of sustainable CSR initiatives include the establishment of healthcare centres equipped with modern medical facilities, hiring and training local workers, providing scholarships and vocational training programs, supporting local businesses, and implementing environmental conservation measures.

These initiatives address immediate needs and promote long-term development within the communities. In Buliisa, Tullow Oil Uganda (which sold its stake to TotalEnergies in 2020) supported the then Buliisa Health Centre IV with medical equipment to elevate its status to a district hospital level. This hospital continues to receive support from the industry to-date.

TotalEnergies EP Uganda, which operates the Tilenga Project, funded the re-construction of the Avogera Health Centre III and the Avogera water scheme to support over 2,000 households in Ngwedo sub-county, Buliisa district. It also sponsors the Elephants, a local football club from Nwoya district, which was promoted to Uganda’s second division, the Big League.

Cnooc Uganda has implemented similar initiatives. The formerly inaccessible Kingfisher Development Area, in Kikuube district, now boasts of a tarmacked road that snakes down the escarpment to the project area, thereby improving accessibility and mobility of the residents.

A water scheme to provide clean water to five villages was revamped and now the locals in the area no longer depend on unsafe water sources. Recently, Cnooc donated a rig to the Uganda Petroleum Institute Kigumba (UPIK) for training and educational purposes.

The Uganda National Oil Company (UNOC) has committed to planting 45 million trees to counter climate change. Furthermore, the IOCs have engaged with the local communities through regular meetings, consultations, and feedback sessions to ensure that their CSR activities are aligned with the community’s priorities and aspirations.

This participatory approach has enhanced community ownership and empowerment, fostering a sense of pride and responsibility among the residents.

Suffice to say, the IOCs are not charity organisations. Having such huge social investments should be applauded by all, especially during the exploration and development stages where they are spending, and not earning anything.

Other companies should pick a leaf, invest in more legacy projects. For instance, Worley, a contractor under the EACOP, is one of the sponsors of Brentford Football Club, an English Premier League team. It would be good to have such an arrangement for a Ugandan sports team.

By prioritising the well-being of the communities, the IOCs not only improve lives but have also established a social licence to operate based on public trust and accountability. This can also prevent social conflicts like those in the Niger delta Nigeria.

corporateaffairs@pau.go.ug

The writer is a director of Legal and Corporate Affairs at the PAU