Bugala palm oil: Balance devt and environmental concerns

By Jennifer Austin
FIRST approved by Parliament in 1998, the Vegetable Oil Development Project (VODP) is a public/private joint initiative with the goal of increasing domestic vegetable oil production.
The investment is meant to boost the agricultural and processing industries and provide a replacement for the $60m worth of oil currently imported, making Uganda self sustainable in vegetable oil production. The outgrower scheme will benefit about 14,000 farmers.
The private investor, BIDCO, recently opened its $25m refinery in Jinja and commissioned the $140m plantation on Bugala Island.
In place of undeveloped grasslands and forests, a productive plantation has begun to take shape.
Nearly 2,000ha have been cleared and planted by BIDCO, with the balance of 4,500ha to be planted by July. 1,000 ha of outgrower and small holder land is also being prepared. BIDCO has built 160 km of roads on the island, developed two nurseries and imported more than one million oil palm seedlings.
One 10,000ha plantation and a mill will employ 100 managing staff who will be Ugandan university graduates, 6,000 workers and is projected to produce $20m worth of palm oil per year.
The project is to consist of three 10,000ha plantations and three mills. However, the project is at an impasse now because BIDCO has not been given all the land it was originally promised.
At the recent commissioning of the Bugala Island palm plantation, President Yoweri Museveni promised to come up with the rest of the land for the project, though he did not specify where it would come from.
Although it has money dedicated to the project, the Government has been struggling to buy enough land on the island because some private land owners have been unwilling to sell. They are now considering the possibility of using forest reserve land on the island or buying suitable land on the mainland.
The Prime Minister, Apolo Nsibambi, has convened a committee with members from the NFA (National Forestry Authority), NEMA (National Environmental Management Authority), the Ministry of Agriculture and Ministry of Lands, to address the issue. According to the Prime Minister’s office, this committee’s report is with the Minister for Agriculture, who is preparing to go to Cabinet to explore the use of forest reserve land on Bugala Island.
The NFA is opposed to the use of the forest reserve land, and stresses that a palm plantation is not ecologically equivalent to a natural forest because the biodiversity of the natural forests would be lost.
A November 2004 press release from the Ministry of Finance states that, “forest reserves or protected lands will not be used for oil palm cultivation.” Despite this, use of forest reserve land has been proposed, leading to rumours that the Government had ordered degazettement of some of the forests on Bugala Island.
NFA public relations manager Gaster Kiyingi says, “We have not seen a document from the Government to degazette the forest.”
Kiyingi says degazetting the forest reserves is not simply done by government decree and that swapping the forest reserve land with land on other islands is complicated. “The laws on how to degazette a forest say everyone must be consulted, from the grassroots level up to Parliament.”
NEMA has approved EIAs for the development project in general, but cannot authorise the use of protected forests.
“The forests are protected by orders of Parliament and the NFA is the semi-autonomous body charged with protecting the forest. It is our duty to protect the physical and legal integrity of the forest land, for and on behalf of the people of Uganda. A lot of money and resources have been sunk into the rehabilitation and conservation of the reserves,” says Kiyingi, adding, “So, the forest should be left alone.”
The NFA also fears the social standard that would be set if the reserves were given over for development. “Opening the reserves for development would be setting a precedent for things we can’t control in future.”
There are 10 strict forest reserves on Bugala Island covering almost a third of the island.
Five reserves that are adjacent to BIDCO land and combine to give 3,700ha have been suggested for potential degazettement.
To date, BIDCO has been given 6,500ha of land, 4,500 of which is acceptable for planting on Bugala Island to begin development.
The full project is to cover 30,000ha of land. Ideally, each plantation needs to be a minimum of 10,000ha between the nucleus plantation and the outgrower land to make it economical to run the processing mill.
Oil palms must be processed into crude oil within 24 hours of harvesting, making land continuity and proximity to the mill an important factor.
“One criteria is that the land is in contiguous sections of at least 250ha. We had wanted 500ha, but have agreed to use plots as small as 250ha. Anything smaller than this is not efficient to manage,” says Kodey Rao, the managing director of BIDCO Uganda.
According to the agreement with BIDCO, if the land is not provided within one year or the start of the project, BIDCO can walk away from the project and the Government will have to refund their investments, which have surpassed $40m already.
The one-year mark passed in December 2004 and the Government has yet to come up with the additional land.
The BIDCO plantation represents a large investment in the risky agricultural sector and is likely to bring many economic benefits to the area. The success of the large investment is also likely to boost confidence in the stability of the economy and attract large investments to Uganda.
At the same time, resources and energy have been put into the identification and management of the ecologically sensitive central forest reserves on Bugala Island and throughout Uganda because of the value of those unique, natural areas.
Government must carefully balance these interests to ensure the VODP is successful in attaining its objectives without compromising the environment, which is also important to the sustainability of development.
Ends