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Report: Palm Oil Project Hurts Land, Residents in Uganda

The environmental group Friends of the Earth-Uganda released a report Monday describing human rights violations and environmental destruction in pursuit of biofuels by a foreign joint venture. The report follows the planting of almost 10,000 hectares of palm oil plantations by BIDCO - an East African oilseed company - with World Bank and Ugandan government support.

The plantations are on islands that had been covered completely with forests, off the coast of Lake Victoria in Kalangala. The hectares that have been planted so far take up about one-quarter of the islands’ land area.

The report says many farmers in the area were contracted initially to grow palm oil plants, but were forced to sell their land because of debts, low income from palm oil, and no food crops. Other farmers were chased off their land.

Unfulfilled promises

Frank Muramuzi, executive director of the National Association of Professional Environmentalists, said BIDCO Uganda promised area residents jobs and electricity.

“Most of the jobs are done by non-residents, the communities living in that area. They get people from Nairobi, they get people from Sudan, they get people from some other places," said Muramuzi. "So you find that those people who had been owning that land, who had been living on that land, they do not get the jobs. The other thing, you are telling people that they are going to get electricity, cheap electricity, and every household will be electrified. But when you go there, they do not have electricity.”

He said the company violated a condition of the government’s Environmental Impact Assessment that requires a 200-meter buffer zone between the shores of the lake and the project, with disastrous results.

“You are spraying the agro-chemicals, and they are going into the lake, and a result the fish are dying. These people have been for a long time living on fish - they have been fishermen and fisherwomen. These people no longer catch fish, and the fish that is there is contaminated,” said Muramuzi.

The Ugandan government initiated its palm oil project in Kalangala district in 2002 with investors through a joint venture between the Wilmar Group of Malaysia, BIDCO Oil Refineries of Kenya, and another company. The joint venture resulted in the formation of BIDCO Uganda Limited and Oil Palm Uganda Limited.

Ugandan government defends deal

The $150-million project is the single largest foreign direct investment in Uganda. The Ugandan government says the project is expected to make the East African country fully self-sufficient in edible oils, saving $100 million in oil imports annually.

Ugandan government spokesman Fred Opoloti said he thinks BIDCO has been successful in employing local Ugandans, and that his government insisted on local job creation as a condition of investment.

“The number of people in the islands is quite great, and it would be unreasonable to expect BIDCO to employ all the people in the islands, but I know a great number of people have been employed,” he said.

Opoloti said local residents will be getting electricity soon through a country-wide rural electrification program.

Environmental concerns

Regarding environmental issues, he said the project underwent a full environmental assessment before it began.

“The environmental department of government is closely monitoring the operations of BIDCO. If there is any sort of digression, government is certainly going to deal with it, and it is taking it absolutely seriously,” said Opoloti.

At a meeting with investors on March 1, Ugandan President Yoweri Museveni pledged an additional 8,000 hectares to enhance the project.

BIDCO managing director Kodey Rao was unavailable for comment. At the March 1 meeting, he said small-scale farmers would earn about $1,400 per acre per year from the cultivation of palm oil trees.

The report was released just before the convening of a World Bank conference on land and poverty. The project is receiving some funding from the World Bank.


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