Oil Exploration in East Africa is potentially a disaster

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Africa Arguments

In 1885 the Berlin Conference divvied up, and created rulered lines across the continent, and precipitated the Scramble for Africa. In July this year, at the  China-Africa Ministerial Conference, in in Beijing, 49 African countries and China slipped quietly under the radar, and  agreed the fortunes of oil and natural gas extraction in Africa. In the meetings it was agreed that there was a need to outline environmental objectives, regulatory frameworks and green guidelines for extraction and development in Africa. But only serious aficionados would have been wondering, or had the time to pursue, questions about the communities- the people- that live in these areas. The attention, such as it is, is on the projected gains of such valuable resources. Local media is bulging with rather Spartan press releases, parroting the (frankly obscure) rhetoric.

Real facts: where is exploration taking place? How many people are affected? How many natural parks, gazetted areas, or conservancies will be mined in? How are communities being consulted? What are the projected profits? How will these be spread out? What facilities for communities (hospitals, schools, roads and local business support) will be built where the rigs are? What are the mechanisms for keeping track of the money? What about offshore investments, who will be monitoring or policing the gains? How will national governments address their already faulty taxation systems, and make public their regional spending priorities?  All these questions are markedly absent.   Such is the obfuscation, lack of media coverage, lack of (for want of a better word) civil society, absence of non-jargonised ways to discuss what is essentially a very layered problem, that to all intents, the effects of oil and gas on real people, on communities, have been forgotten. Side-lined. Or are they being deliberately ignored?  The resource curse syndrome is well documented. Says the African Development Bank  “oil/gas price volatility, oil and gas-related social and political  conflicts and poor oil/gas revenue  management have largely eroded the significant gains from higher but  volatile export revenues”.[i]

There are over 50 million pastoralists in Africa[ii]. They occupy a good proportion of the land earmarked for oil and gas explorations. Despite having the technology to identify minute marine life at over 2km below the sea level,  or watch street lights from space, knowledge about the vulnerable livlihoods of these people who move constantly, who eschew land deeds, and who live below the poverty line is scant. Ditto for coastal  fishing communities: in UN, Sussex University and NGO circles they are  already an acknowledged ‘problem’,  in that malnutrition, social isolation, appalling mortality rates, low levels of literacy and death in childbirth are significantly higher than their city cousins. In Kenya and Tanzania coastal regions are peripheral to central government, job prospects (artesianal fish farming, boat building, cashew and sesame farming) lag way behind the rest of the region. There has been death, violence, and links to Al Shabaab and Piracy in the Coastal regions. Even before a Nigeria or Angolan disaster, the social ramifications of exploration are mind-boggling.

The agendas of concerned  NGO’s (who behind the scenes, who have been lobbying for  ‘no go zones’ for extraction purposes, and a much more rigorous and thorough approach to governance issues) are not in the public eye.  They can’t risk the wrath of litigious oil companies. Dr. Li Lin, Deputy Country Representative at WWF China says “Investing in sustainability is fundamental for both Africa and China’s long-term prosperity. It is in both China’s and Africa’s interests that high governance standards are part of the aid, trade and investment portfolio of China in Africa, positively influencing China’s footprint in the continent.” But where are the equivalent of ‘planning gains’ or  community consultations, informal or not, when it comes to governance? Where is the evidence of any of this happening?

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Poverty is bad for Governance.

This is fairly self-evident: the wider the gap (geographically, economically, culturally) between those making decisions, and those affected by them, the greater the potential for misunderstandings and  problems.   What is missing, in East Africa, are the discussions, the editorials, the phone ins and the investigative programmes, the outrage, curiosity or involvement from the communities in the areas that will be affected by drilling for oil and natural gas. It is no exaggeration to say that literally, having lived for five years in Tanzania, and then finally schlepping down to some of  the regions involved, there is almost impossible lacuna of information. From interested expats, to informed regional environmental consultants,  to oil rig workers, people in the villlages on the coast and inland. All are gagging for more information.

The areas potentially affected by natural gas and oil exploration are massive[iii].  Ranging  from Somaliland in the North,  traversing West into Uganda and DRC, and right down to Mozambique (and encompassing Madagascar, the coasts of Kenya, Tanzania and Mozambique) these are the most biologically rich, environmentally complicated areas in the world. In the Albertine Basin in Uganda (already flagged up by the World Resources Institute as an area of potential conflict for water and fishing resources) the media talk is on Tullow Oil’s success at renegotiating access, not of Museveni’s alleged displacement of the Acholi people there[iv]. There are few existing baseline surveys about the environmental vulnerabilities and perils, but what is categorically missing, is information networks (for both gaining and dispersing information) and co-ordinated data about the people living in these areas.

At the moment oil is but a tantalising dream. However as anyone who’s spent more than two weeks by the pool in Africa knows, most of the real stuff goes on via pavement politics. In bars, in shebeens, in the market, in the public ‘barazzas’ (terraces) and in public taxis: mutatos in Kenya, Daladalas in Tanzania, Chapas in Mozambique. It is here, plus a few opportune evenings hanging out with the Dutch, English and French working on the rigs in Mtwara and Songo Songo (both in Southern Tanzania) that the full complexity of the issues unfurl.  The riggers agree that oil is a definite. So do the environmental biologists, diving down into the corals, and so do directors of larger NGO’s. At the moment, disgruntled people living in South Tanzania complain they’re getting no work from the natural gas exploration. There are hiked property prices for the incoming workers, and pole dancing clubs in Mtwara. In Kilwa there’s electrification (due to natural gas) but confusion about why no jobs have materialised. In Dar Es Salaam logistic companies (supplying cars, hospitality, security) are having a field day, as the security issues for vulnerable (and expensive) kit and people need to be addressed.  Young and old Tanzanians, with little English, and still waiting for cashew and sesame payments from national government in Dar Es Salaam,  are both frustrated and unable to organise: whether real or imagined, the perception is that they have no voice. With anecdotal evidence of 80% unemployment, they have no way to say to Andarko, Petrobas and BG Gas (the three biggest players currently in the area) what they want, and to go through (the admittedly slow) process of community consultation.

Africa is (once again) the ‘new frontier’; the stronger, more democratic economies make investment attractive. This has kicked off, domino style, a bewildering array of developments: from Special Protected Zones (tax breaks and incentives for large factories and industrialisation- paper, sugar, breweries) in certain countries to major trans-regional projects, roads, ports, oil refineries, whole new towns, airports and landing strips. Political  uncertainty in Nigeria, Libya and Algeria where existing oil exploration is happening,  massive Chinese investment also contribute to the euphoria.

Concerned  academics,  Directors of NGOs (who by and large actively stress their desire to stay out of the limelight) environmental consultants, and local community leaders, are all  following  the  LAPSSET (Sudan pipeline) the proposed ‘development’ of the historic port of Lamu, in Kenya, the East/West Serengeti Highway, and the (as yet unrelated to natural gas exploration), threats to specific species in the Coastal regions and the emerging conflicts in Mombassa, and in Albertine region in Uganda. What is fascinating, is the piecemeal nature of the debate. Attention has tended to focus on the environmental issues. Resource analysts , rather than encompass the  much more complex and bigger social impacts of exploration, focus on geology, or the engineering. If anything does go wrong, again the emphasis is on environmental damage. However financial systems or modelling can not ‘bail out’ oil companies in the same way they can in other areas, as the risks of piracy, and civil conflict are too great in the areas concerned. And they have no risk plans atall for local communities, who are not considered an economic asset.

This is not to suggest that gas and oil extraction is a de facto bad thing. But the debates- such as they are- take place in niche trade journals, and is indicative of the parochial nature of this region, and the complexity of the issues. Governance is about how roads service communities, and small farmers,  not just the oil transporters. Governance is about asking which hospitals and schools get built alongside the the refineries. What percentage of the profits go back to the communities. If and how fishing livelihoods will be affected. Whether people understand the risk asessments and safety nets in place (it is not good enough for companies to endlessly replay computer generated scenarios on computers in HQ’s in Northern locations). It is not good enough to create the conditions for piracy and revolt, and then be surprised when it happens.

The oil companies must show us, the public, what they are doing, where, and how the incomes, profits are distributed, and how many sustainable job plans are to be put in place. As Rakesh Rajani, director of Twaweza comments: “Tanzania has undertaken a significant number of anti-corruption activities including an elaborate anti-corruption agency that has produced a strategy and plan, more investigations, and more cases in court. Yet the overwhelming feeling among citizens and experts alike is that Tanzania is losing the battle against corruption. In my view the most important reason for this is the lack of transparency.”

Rajani makes vital points: that in the planning of oil and natural gas exploration, vital components of governance are missing. For example East African governments would do well to follow the examples  of Brazil  (hospitals) or the Phillipines ( schools, www.checkmyschool.org) who  make information happen in real time, disaggregating the information, so it’s meaningful and understandable to  ordinary citizens, and  using new technologies to mash, display and transmit data, particularly via the internet and the mobile phone. This will create practical and safe opportunities for citizens to give tips, ideas, feedback and whistle-blow, in a manner that is constructive.

Of all of these perhaps the most important is the management of extractives . Says Rajani:  “Making every aspect of gas transparent — reserves, contracts,taxation, transfer pricing, accounts, environmental assessments, governance structures, etc — could enable the country to reap real benefits and to achieve key goals for present and future generations; whether we do so is uncertain but there are no signs yet to suggest that we have leadership, public pressure and imagination to get this right”.

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SOURCES, READINGS AND FOOTNOTES

[i]http://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/Commodity%20Brief%20Oil %20and%20gas%20Final.pdf

 

[ii] According to the UNDP report, Southern Tanzania ranks as one of the least developed areas in the world UNDP http://hdr.undp.org/statistics/data/country_fact_sheets/cty_fs_VUT.htm

 

[iii] http://www.platts.com/newsfeature/2012/eastafrica/map and   http://www.platts.com/newsfeature/2012/eastafrica/index

 

[iv] http://blackstarnews.com/news/135/ARTICLE/7964/2012-02-12.html and http://acholitimes.com/index.php/news/acholi-news/510-pensioners-vow-to-meet-museveni-over-benefits-and-government-programmes

 

The first exploration took place in Mnazi Bay, in the early 1950’s, source The Citizen “Three major firms join search for oil, gas”  Tuesday, 24 January 2012 By Felix Lazaro

 

Allafrica.com/stories/2011111100232.htm

 

See The Citizen http://thecitizen.co.tz/news/4-national-news/19209-three-major-firms-join-search-for-oil-gas.html, http://www.thecitizen.co.tz/business/13-local-business/16277-petrobras-teams-with-shell-in-oil-and-gas-exploration-in-tanzania.html

 

Reuters:http://af.reuters.com/article/investingNews/ idAFJOE81N02W20120224; Guardian http://www.guardian.co.uk/business/ feedarticle/10163887

 

Cooksey, Brian, Kelsall, Tim, The political economy of the investment climate in Tanzania, DFID AFPP, 2011 Funded by DFID, available via AFFP, Africa Power and Politics Programme,. Accessed via ODI website June 24th 2012. And see    http://www.corruptiontracker.or.tz/dev/index.php?option=com_content&view =article&id=125:donors-press-tanzania-on-corruption-as-ti-reports-an-increase&catid=18:current-issues-&Itemid=51&lang=en

 

The East African, P8 “Poverty, What Poverty? East African elite hold US $1.3billion in Swiss Bank Accounts’ contrary to popular opinion, only 3-5% of this stems from corruption, over two thirds are multinational accounts, for the purpose of tax avoidance. Ministers from the six countries (Burundi, Kenya, Tanzania, Rwanda, Uganda and Mozambique) claimed to have ‘no knowledge’ of how the monies ended up there.

 

Dr Rob Ahearne, Lecturer East London University, UK PhD subject “oil and gas, citizenship, modernity and change in Southern Tanzania,” personal conversations, 27th, 28th June 2012, Mtwara, Tanzania.

 

http://www.undp.org/dpa/publications/AfricanStockMarkets.pdf accessed Oct 26th 2007

 

 

UNDP Website http://www.undp.org/dpa/publications/AfricanStockMarkets.pdf accessed Oct 26th 2007, it has also dropped down in its transparency rating, according to Transparency International, and for the first time actually lept ahead of Kenya in its corruption ratings.

 

Discussion with UNDP/USAID consultant Fiona Flintan, Arusha, June 2012

 

Cooksey, Brian, Kelsall, Tim, The political economy of the investment climate in Tanzania, DFID AFPP, 2011 Funded by DFID, available via AFFP, Africa Power and Politics Programme,. Accessed via ODI website.

 

Ernst and Young, International Energy Agency, Business Review, Oil Review Magazine.

 

http://www.wri.org/project/equity-poverty-environment;

 

http://www.upi.com/Business_News/Energy-Resources/2012/02/29/East-Africa-hits-it-big-in-oil-gas-boom/UPI-28311330532003/

 

http://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/Commodity%20Brief%20Oil%20and%20gas%20Final.pdf

 

List of all 45 oil, gas and pipeline projects underway in Sudan, Somalia, Ethiopia, Chad, DRC, Mozambique, Tanzania and Kenya  http://www.mbendi.com/a_sndmsg/proj_list.asp?P=1&C=1&R=0

 

Conversations with Carolyn Waltenberg (Tanga Association of Tourism investors), Fiona Flintan, Jo Anderson, Dr. Carlos Da Silva,  Professor Marc Kochzius, Jaques Cousteau, IP, MR, Dr Rob Ahearne, Prof Wolfgang H Thome.

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