Karamoja struggling to benefit from a rich mineral resource

Nestled in the hills of the north eastern Uganda, a small Karimojong mining community in Nakabaat in Moroto District is struggling to come to terms with the consequences of mineral resource exploitation.

Karamoja is rich in two aspects: mineral resources such as tin, gold, copper and marble, among others; and a diverse culture of a people consisting of tribes from Kenya, Uganda and South Sudan.

However, living condictions are deplorable even as the area’s huge mineral deposits have the potential to revitalise the local economy.

The evidence on ground leaves a lot of unanswered questions. There is very little to suggest that the local population is thriving.

Nayor Grace, a former primary school teacher, who lives on the suburbs of Moroto Town, quit teaching about 20 years ago to join artisanal mining.

At the turn of the decade in 2010, Nayor had observed a lot of changes in the mining fields after several mining companies had started to trickle into the sub region.

Nayor, who has closely watched the change can relate to the proverbial Old Benjamin, a character in the George Orwell’s book - The Animal Farm - who used to utter nothing beyond the cryptic remark ‘donkeys live a long time.’

From 2010, she has lost count of how many mining companies have explored the sub region in search of precious minerals.

However, her memory can only serve her three major companies - Jan Mangal, Dao Marble, and Sun Belt Mining Company.

Many mining companies, beyond the three, have explored into large swathes of land that is sometimes closed off to public access.

This is an issue that has or will breed conflict. However, for now, Karamoja is faced with the issue of mining companies that do not provide fair compensation in return for land acquired for mining activities.

Nayor is a beneficiary of compensation offered to artisanal miners in 2018 by SunBelt Company.

This, considering on which side you view it, could have been perhaps the biggest and most transparent compensation to ever happen to locals.

Artisanal miners received between Shs150,000 and Shs200,000.

However, things had been worse in previous cases and could now be worst.

“We had compensation challenges with the first companies that came,” Nayor says, “We have Jan Mangal, Dao Marble. They could not sit down with the community. Dao Marble, which has grown into Multitask still has issues with the community too.”

Dao Marble, started marble mining in 2013 in Moroto District after acquiring a mining lease from the Energy Ministry.

However, by 2017, the company had abandoned its operations after failing to service a loan with a bank.

Until now, the company left behind a trail of destruction both environmentally, and its failure to compensate locals is a story that will be retold for long.

“They had a memorandum of understanding with the community to allow the compensation process to take place but they wound up, and left,” Nayor says.  

Where is the problem?

At first glance, the vast plains of Karamoja may appear vacant and unexploited. But in reality, land has is owners - land is owned communally.

Therefore, this challenges any genuine attempts to identify rightful owners for compensation.

Edward Eko, the Moroto District assistant chief administrative officer, says Uganda’s Mining Act requires a surface rights’ agreement to be negotiated with land owners prior to active mining and payment of royalties.

However, he says, the same law is silent on exploration work and does not require any communication or consent from the local population during exploration work.

“Most companies acquire exploration licenses, and take on exploration activities without prior consultation with communities,” he says.

Therefore, it is clear that some companies do not do due diligence with local authorities, and some are actually brief case companies with limited capacity to do extensive mining activities. 

Emmanuel Achellam, a programmes officer at Advocates for Natural Resources and Development, says the type of land ownership in Karamoja is majorly customary and communal, governed under family and clan systems. 

It has been like this for a long time and the attempt for some communities that have interfaced with mining companies to secure their land for onward compensation is breeding conflict.

Communal land ownership has been a weakness that mining companies are using to exploit communities.

“Having communal land comes with challenges. If you don’t have a title or any legal document, you lose the rights to negotiate. When we talk about compensation, it becomes hard to negotiate with mining communities,” Eko says. 

The problem is even more widespread with companies masquerading as ‘big names’ yet they are nothing but speculators. “When we give them these areas, some of them sometimes disappear, and others work with sections of leaders in communities, who are coerced into selling their land,” Eko says.  

With several development projects taking place, however, neither Moroto nor any other districts such as Kotido, Nakapipipiriti have put together compensation rates.

This poses challenges, especially for the protection of the rights of land owners and their property as required by law.

Eko agrees that communities in Moroto District have lost money during compensation since it is based on estimates.

“Every time we go for meetings, locals complain about surface rights and royalties,” he says, and notes that whereas it is a requirement for a district to have compensation rates, there has been less efforts towards putting them in place.

For mining communities, the challenge has also been the Mining Act, which Eko says has gaps, and one such gap is the process of compensation.

“At what stage do you engage the mining company for compensation.  Is it at exploration or prospecting?” he wonders, “Consultation only happens when the company has a mining lease, and this is the last stage for mining to commence.”

Using community trusts

Community trustees are slowly taking shape within Karamoja’s mining areas.  These act as vehicles for receipt of surface rights’ payments, and land custodians.

For instance, in 2018, a memorandum of understanding was signed between Rupa communities in Moroto, and SunBelt Mining Company.

The communities were represented by Rupa Community Development Trust - created in 2017 – to represent more than 35,000 beneficiaries in the mining negotiation processes.

The trust was based on the National Land Policy, which calls for a provision to register customary land held under trusteeship by traditional institutions or cultural leaders on behalf of communities. 

 A land trust is a private agreement in which a party - the trustee - holds property for the benefit of another party - the beneficiary.

Information from the Directorate of Geological Survey and Mines shows that the negotiations between SunBelt and Rupa Community Development Trust resulted into a Shs1.8b compensation agreement for surface rights on behalf of the trustees for damages caused by the company.

So far, local leaders have viewed this as the most ‘fair’ compensation and a good negotiation under community trusts, and perhaps can be used as a learning model for other mining areas within the region.

Achellam says Rupa Community Development Trust holds part of the land as a trustee and in case compensation is paid, the trustee will find a way of paying community members.

“Trustees are more ‘trustful’, and they  have helped communities to get more organised,” he says, “When mining companies pay for surface rights, there is negotiating power from the community, however, in such entities were they don’t exist, there is conservativeness from the side of mining companies because of botched ownership of  land.”

Achellam in his observation says mining companies sometimes ‘refuse’ to pay for surface rights because they are not sure of who the land belongs to.

“But here where they are more organized, they feel comfortable to give trustees compensation, and even royalties,” he notes.

This story was produced with grant support from Natural Resource Governance Institute through African Centre for Media Excellence.

The solution

Some analysts believe that the solutions to exploitation lies in the creation of trustees.

Trustees have to be accountable for corporate social responsibility from mining companies, and their role can stretch to making audits, disclosure of books of accounts, and community outreaches.

According to Advocates for Natural Resources and Development, an NGO that operates in the region, there is a window of hope as they, and districts have sought to develop a document for standard compensation rates.

Frank Tumusiime, the Advocates for Natural Resources and Development coordinator, says the Land Act requires districts to update compensation rates of non-permanent form such as trees, crops among others, every year.

However, this has not been done, and having realised compensation is a big issue in Karamoja, therefore, standard compensation rates are being developed.

With the new Mining Bill in place, Karomaja leaders are raising the bar, and will require that for any stage of seeking a mining license, all processes should involve community consultation.