Recent complaints by farmers over exclusion from oil and gas contracts has given the Petroleum Authority of Uganda (PAU), the sector regulator a new task.
The task is about biting if contractors in the oil industry continue to violate the country’s local content policy of 2018 that seeks to ensure the host community partake of opportunities in the sector.
A virtual meeting was organised by PAU on November 2 over the same.
It was attended by farmers, oil companies-CNOOC Uganda Limited, TotalEnergies and Uganda National Bureau of Standards (UNBS).
The catering firms subcontracted by the oil firms including Mineral Services Limited (MSL), GCC Services limited, Newrest UIS had to explain to stakeholders their plans in fulfilling the local content policy.
Peninah Aheebwa, PAUs director technical support services revealed that the past events where farmers and other local firms have approached them with complaints of being excluded are of a big concern.
This comes at a time Uganda has embarked on the development phase to extract its 6.5 billion barrels of oil, gas which was discovered in the Albertine Graben in 2006 hence increasing demand for foodstuffs to feed workers in oil camps.
The meeting was prompted by an April 22, petition by Monica Kabatoro, Hoima District Farmers Association (HODFA) chairperson to Bunyoro Parliamentary Caucus, expressing dissatisfaction at the way the farmers attempting to participate in the oil sector are being frustrated by the oil companies and contractors.
The dissatisfactions include failure to allow them supply directly, lack of monitoring by the regulator, ambiguity of standard requirements and price instability which the farmers say are being used to lock them out.
Farmers attended the virtual meeting on a single computer at HODFA offices in Hoima City.
Speaking after the meeting, some farmers accused the aforementioned catering farms of giving shallow and unconvincing presentations.
Others noted that the meeting is a positive indicator that their grievances will be addressed and they will resume supplying the sector which is currently dominated by firms from outside the oil-rich region.
“There seems to be a change of attitude in the way they will start handling our participation in the oil sector,” a source added.
Aheebwa, however, was quick to observe the need to have a strategy that will enable the sourcing of food and other services locally without hurting their operations and also benefit the community.
On the other hand she said not all is gloom as $4b of contract value that has been executed, $2b have gone to Ugandans and out of that $1m to companies based in the communities.
In addition, Aheebwa said by June companies and their sub-contractors were employing around 6, 000 employees, 94% of whom were Ugandans and 2,000 coming from the host community.
Farmers rejected a move to have contractors get a deal with aggregators like Pure Grow Africa who have built substantial space and are able to handle big volumes.
Aggregators are agricultural businesses that consolidate and distribute farming products.
“Pure Grow Africa will be able to pass on this obligation to the farmers to bring food to them which meet defined standards because it would not be prudent to go to the market and purchase small quantities,” Aggrey Ashaba, the General Manager GCC services limited, said, before his assertion was watered down by Aheebwa who insisted that having aggregators has pros and cons.
“An aggregators may not work where there is a collection centre because it is not viable on the side of the community. You cannot carry food when you have a collection point which has better facilities compared to that of the aggregator.”
Aheebwa also called for a need to include flexibility in terms of pricing so that the host community can benefit.
“It will be absurd to leave the oil-rich area when the lives of the people have not improved. Things are being done in an ad hoc manner, we have information that a call to supply comes and after delivering they (local farmers) are stopped after investing in logistics and the payment cycles are unsustainable for a community farmer,” she remarked.
Moses Byenkya, the HODFA Coordinator said they already have their collection point at HODFA offices in Nyawaigambe in Hoima City which currently only lacks a cold chain but would invest in it if given business.
“We are already organised in the existing organisations, what is missing are the opportunities which are not given to us because of selfish interests caused by insider dealings,” Byenkya added.
Ronald Ahimbisibwe an official from UNBS said despite local enterprises being informal, they have observed that standards and their implementation by the local community are considered as not important.
He said everyone thinks can produce and supply which is one of the reasons they are eliminated by the contractors.
He asked the ministry of agriculture, animal industry and fisheries to train grassroot farmers on standards if they are to be certified by UNBS to ensure safety, quality and curb high risks of health accidents.