STRENGTHENING GOVERNANCE AND PARTICIPATION IN UGANDAS PETROLEUM INDUSTRY Governments Policy on Compensation and Resettlement

BY Gilbert Kermundu
Chief Government Valuer

Valuation Division Ministry of Lands, Housing & Urban Development Government of Uganda Email: kermundugilbert@yahoo.co.uk
21st 22nd October, 2013 National Conference on Oil &Gas: Key Stakeholders Conference on Strengthening Governance and Participation in Ugandas Petroleum Industry Presented at Imperial View Hotel, Entebbe 1

Structure of Presentation
1. 2. 3. 4. 5. 6. 7. Introduction Compensation & Resettlement Legal, institutional and policy framework The land acquisition process (recommended) Basis of assessment and what is assessed The role of the CGV in Land Acquisition Sources and solutions to Grievances

Introduction
This document aims at presenting Governments policy on Compensation and Resettlement Processes in Uganda. Land Acquisition is defined as a process through which the Government acquires land (private) for public use or interest.

Land acquisition takes into account the following:a) The taking of private property (land) b) By Government c) For Public use/interest d) With just compensation

Compensation & Resettlement

Compensation: Defn: Indemnification; payment of damages; which is necessary to restore an injured party to his former position. Resettlement: Defn: This refers to the movement of individuals or groups of people from one location to another, which may be permanent or temporary.

Legal, institutional and policy framework

The Constitution under Article 237(1) vests all land in the citizens of Uganda. However, under Article 237(1) (a), the Government or

Local Government may acquire land in the public interest. Art.26(2)(b)prompt payment of fair & adequate compensation prior to possession/acquisition Art.237(2)(a).takes cognizance of Art.26
The following are some of the legal instruments that guide Land acquisition for public use. Land Act CAP 227, 1998 (as amended in 2010) The Land Acquisition Act CAP 226, 1965 The Mining Act, 2003: Section 82

Legal, Institutional and Policy Guidelines Cont

The Registration of Titles Act Cap 230, 1924 The Survey Act CAP 232, 1939 The Surveyors Registration Act Cap 275, 1974 The Access to Roads Act Cap 350, 1969 The Local Governments Act Cap 243, 1997 (as amended) The Physical Planning Act 2010 The Petroleum Act 2012

Legal, Institutional and Policy Guidelines Cont

Uganda does not have a National Resettlement Policy. However, in addition to the aforementioned laws, policies and guidelines, Uganda being a signatory to international conventions and treaties, International guidelines such as those issued by World Bank (The World Bank Operational Policy 4.12, Framework of November 2002) are adopted. Resettlement in Uganda can either be Physical Resettlement or Monetary Compensation. However, monetary compensation is the generally the most preferred form of resettlement by the PAPs; Project Affected Persons (PAPs) are given adequate cash to purchase land, rebuild houses, replant crops and re-establish livelihood in places of their choice. Financial management training is given to PAPs prior to their compensation to avoid the misuse of the respective compensation award.

The land acquisition process

This section describes the general preliminary procedures to be undertaken in the land acquisition process: Reconnaissance surveys Community consultation involved. Identification and demarcation of the land to be acquired location and size - Community involved. Declaring an area a planning zone by the Minister.

The process cont

Notification of the land owner(s) of the intended acquisition. Identification and verification of ownership.

Valuation to ascertain the replacement cost/value .

Disclosure, arbitration, compensation and resettlement. Detailed cadastre surveys carried out and titling by Uganda Land Commission/Government.

Basis of assessment and what is assessed

Claim viz. Basis

Category of claims Basis of assessment
Owners Land Cash compensation based upon Market Value of land + disturbance allowance (15% or 30%) See Land Act sec.77(2) Entitled to compensation based upon as apportioned to land + disturbance allowance (15% or 30%) See Land Act sec.77(2) Have NO CLAIM to land, entitled to compensation for improvements + disturbance allowance (15% or 30%) See Land Act sec.77(2) Cash compensation based on Replacement Cost as determined under District Compensation Rates + disturbance allowance (15% or 30%) See Land Act sec.77(2)
National Conference on Oil &Gas: Key Stakeholders Conference on Strengthening Governance and Participation in Ugandas Petroleum Industry Presented at Imperial 12

Tenants Land

Licensee Land

Owners Non Permanent Buildings

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The basis contd

Category of claims Basis of assessment
Owners Permanent Buildings Cash compensation based on Market Value-Land Act Sec.77 (1b) + disturbance allowance (15% or 30%) See Land Act sec.77 (2). -Current Replacement Cost Cash compensation based upon District Compensation Rates + disturbance allowance (15% or 30%) See Land Act sec.77 (2). (Rates for crops are determined on a net or an expected one season output). Where time allows, claimant should be given an opportunity to harvest crops that are due for harvesting.
National Conference on Oil &Gas: Key Stakeholders Conference on Strengthening Governance and Participation in Ugandas Petroleum Industry Presented at Imperial 13

Crops and Trees

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The basis contd

Category of claims
Protected Areas (National Parks, Wildlife Reserves And Forest Reserves)

Basis of assessment
The protected areas are owned by Government and acquisition ought to be handled REASONABLY unless these are licensed to private user under a SPECIAL LEASE. CONSENT to enter and use land in protected areas should be sought at first instance As a result of the restrictions, the land value is diminished (in value) also known as diminution. The diminution rate varies depending on the circumstance.

Land under diminution

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 Market Value: Defined as the estimated amount for which a property should exchange at the date of valuation between a willing buyer and a willing seller in an arms length transaction after proper marketing wherein the parties has each acted knowledgeably, prudently and without compulsion. Market values are determined by the Valuer and are based on land selling values governed by the following factors: Location in relation to urban centers Economic activity in the area Physical and geographical factors Population density Vicinity to services such as water electricity and roads Cultural attitudes to land transactions. Sources of information for market values are derived from field enquiries in the various project areas, land/valuation offices and estate agents.
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Bases Defined

Definition of Basis Contd

Replacement Cost: Defined as the estimated cost of erecting the subject building, or a modern substitute having:- the same gross internal area and ancillary site works as that existing, together with the relevant professional fees and other associated expenses directly related to the construction & site work. Diminution generally refers to the act of decreasing or reducing the worth of something (land, in this case) caused by an action of a second party or entity. It is a recognized form of actionable damage (to land) in law.

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Definition of Basis Contd

Compensation for property damages arising out of diminution is measured by loss in property value. Diminution is a form of land degradation as the affected land may not be used for its highest and best use. Highest and Best Use is defined as the reasonable probable and legal use of vacant land or improved property which is physically possible appropriately supported financially feasible and that results in the highest value
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The role of the CGV in the process

1. All government entities are required by law to compensate Project Affected Persons (PAPs) based on valuation report authenticated by the Chief Government Valuer (CGV). 2. However, following the human resource constraints in CGVs office to undertake the valuation exercise, the role of CGVs office has in most cases been limited to supervision of Private Consultant Valuers engaged to do the valuation on behalf of government. 3. CGVs office is not involved in the procurement of the consultancy.
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Key Professional Team Composition

1. Registered Land Surveyor (for land surveys) 2. Registered Valuation Surveyor (for valuation aspects) 3. Sociologist (Community engagement, socio-economic

baseline studies)
4. Any other deemed relevant

Sources of Grievances
1.

2.

3.

4. 5. 6.

Misinformation - (give timely, accurate and reliable information to stakeholders). Compensation delays - (Pay on time. A shilling received today is more valuable than that received on a later date). Anxiety and speculation(sensitization and engagements, cut-off dates e.t.c): DO NOT ACCEPT HOPE VALUE! Determination of entitlement (Due diligence assessment) Dispute on ownership (Local leaders come in handy. Consult Land office for other inquiries) Handling vulnerable groups (Special arrangement be made for claims not handled under valuation)

Questions and Answers

Key Question What are the Pros and Cons of physical resettlement in Ugandas land acquisition Process?

THANK YOU