A section of over 1600 residents living near the highly contested Hoima Sugar Ltd has petitioned the NCBA bank to block its intended funding to the factory.
Joined by the Strategic Response on Environmental Conservation (STREC), the residents told the Managing Director of NCBA Bank Mr. Mark Mayobo that the factory’s Kyangwali Mixed Land Use Project is inhumane.
The contested project, which includes a sugar cane plantation along with other infrastructure developments, has severely threatened the well-being and livelihoods of local communities.
“The project has also resulted in the deforestation of natural, reserved forests, and has violated several Ugandan laws. Civil society groups have long fought against the project, including suing Hoima Sugar Limited (Hoima Sugar) for an inadequate environmental and social impact assessment,” reads part of the petition.
On July 14, 2021, NCBA Bank Uganda posted on Twitter about providing asset financing to Hoima Sugar.
In supplying asset financing via trucks, NCBA Bank is enabling Hoima Sugar to destroy the treasured Bugoma forest and harm the well-being of local communities.
The Bank’s support of Hoima Sugar links NCBA Bank to the various environmental, social, and governance-related issues associated with Hoima Sugar’s activities in Bugoma Forest. This asset financing contradicts NCBA Group’s own commitment to “sustainable investment and community growth”.
The disgruntled locals said that due to the negative social, environmental, and biodiversity impacts of Hoima Sugar’s activities in the Bugoma Forest, NCBA Bank must:
Withdraw asset financing immediately and require early repayment from Hoima Sugar Limited
Publicly urge the halt of the Kyangwali Mixed Land Use Project
Support and encourage efforts to ensure Hoima Sugar provides financial redress for negative impacts on affected communities
Summary of key issues
• Loss of employment and livelihoods: Bugoma forest provides employment for communities living in the area, such as in Uganda’s National Forestry Authority or the tourism sector. As the forest diminishes, so do forest-dependent jobs. For instance, the National Environment Management Authority (NEMA) found that the deforestation which occurred in Hoima Sugar’s project area “has affected the quality of the site for eco-tourism purposes”. Additionally, sugar cane growing replaces land typically used for pastoral farming, which is another customary source of income for local communities. Hoima Sugar’s plantation has either employed migrant laborers or, for local communities, established exploitative contract farming schemes. There have been numerous reports of exploitation for local contract farmers, including farmers having to bribe officials to access services and wait months for pay.
• Depletion of forest resources: The deforestation tied to Hoima Sugar’s activities could threaten food security and sovereignty among forest dwellers and communities living adjacent to the forests, as mushrooms, honey, wild coffee, yams, and other vegetables and fruits commonly sourced from Bugoma Forest become depleted. Other forest goods, such as rattan canes and raphia palms for making furniture and medicinal plants are vital assets for communities’ livelihoods and health. Finally, deforestation, along with the influx of migrant workers to Hoima Sugar’s project site, could put stress on forest resources, including a fuelwood shortage. This shortage adds pressure on not only the protected Bugoma Central Forest Reserve but also on the local communities who have historically lived in the area, particularly women and girls who are responsible for collecting fuelwood for cooking.
• Cultural degradation and loss: Within Bugoma Forest, there are multiple places that hold cultural and spiritual values that are irreplaceable and distinct to Bugoma Forest. Hoima Sugar’s 2020 Environment and Social Impact Statement (ESIS) identified that sugar cane growing will risk destroying ancestral burial grounds and the “loss of cultural values associated with several cultural sites”.
• Increase in human-wildlife conflicts: The habitat loss that results from land converted to sugar cane displaces wildlife from their home range and forces them into other parts of the forest. The decreased range of wildlife, coupled with an increase in human activity due to an influx of workers resulting from Hoima Sugar’s plantation, has escalated human-wildlife conflicts in the area.
• Destruction of threatened species’ habitats: The Bugoma Central Forest Reserve plays an enormous role in providing habitat and migratory corridors for wildlife. Namely, the Reserve is a sanctuary for nearly 600 endangered chimpanzees and the endemic Ugandan mangabey, who exist only in this forest. As Uganda promotes itself as the “primate capital of the world”, habitat destruction undermines the development of the country’s tourism sector. Deforestation from Hoima Sugar’s activities in the Bugoma Forest could also pose harm to the bush elephants, butterflies, and 225 bird species inhabiting this area.
• Loss of a critical carbon sink to combat climate change: Covering more than 400sq km (154sq miles), Bugoma Forest is an incredibly valuable carbon sink, meaning it has a large capacity for absorbing carbon dioxide (Co2) emissions. This is vital in tackling climate change. However, sugarcane production contributes to climate change due to the greenhouse gases that are released throughout the production lifecycle. This includes emissions from the conversion of forests into monoculture plantations, grasslands, or other carbon ‘sinks’ into cropland; the use of fertilizers and pesticides during sugarcane cultivation; and the electricity generation and use of fuels and chemicals during sugar processing at sugar mills.
• Water shortages and pollution: Bugoma Forest is a key area for catching water and feeding into the main rivers, which eventually drain into Lake Albert. With deforestation, the forest’s water catchment capacity will greatly reduce, which will then restrict the amount of water flowing into nearby Nguse, Howa, and Rwemiseke Rivers, and Lake Albert. Additionally, sugar wastewater from Hoima Sugar’s plantation, which is likely to include fertilizer and other agrochemicals, is being dumped into surrounding streams. Due to this, stream water is unpotable. Water shortages and pollution could threaten the livelihoods and health of communities reliant on these rivers and Lake Albert.
Legal and regulatory violations
• National Environment Act (2019): In September 2022, the National Environment Management Authority (NEMA) announced that by degrading natural, reserved forest areas, Hoima Sugar had breached condition 4.3(I)(C) of the project’s approval, which was granted under section 157(f) of the 2019 National Environment Act. Due to this violation, NEMA ordered Hoima Sugar to immediately stop any further deforestation and restore degraded areas. NEMA has noted that failure to comply with the given instructions will result in canceling the project’s approval certificate and “further legal actions against Hoima Sugar Limited.”
• National Forestry and Tree Planting Act (2003): The project should be considered a violation of this act due to Hoima Sugar’s deforestation of Bugoma Central Forest Reserve, which was gazetted as a forest reserve in 1932 and protected under this act.
• National Environment (Wetlands, River Banks, and Lake Shores Management) Regulation (2000): This regulation prohibits any activity in a wetland without a permit from NEMA. NEMA did not give Hoima Sugar a permit to carry out activities in wetland areas, and instead recommended the preservation of wetlands. This means the deforestation that has occurred in Bugoma Central Forest Reserve, which contains wetlands, violates this regulation.
• Environmental Impact Assessment Regulations (1998): Hoima Sugar and NEMA have been sued by civil society groups regarding the project’s Environmental and Social Impact Assessment (ESIA). Groups claim that NEMA violated regulations 19 and 20, among others because the institution did not call for public comments on the ESIA. Groups sued Hoima Sugar and as part of the lawsuit, asked the court to declare that the company’s ESIA was “shallow, inaccurate and misleading hence threatening the right of Ugandans to a decent, clean and healthy environment”.
• The Water Act (1997): Communities have faulted Hoima Sugar for polluting community water sources due to improper disposal of waste products like molasses.
• Physical Planning Act (2010): This act established a procedure for creating and approving physical development plans, in order to prescribe land uses for different parts of districts across Uganda. According to the Kikuube District Local Government’s Physical Development Plan (2020-2040), the area for the Kyangwali Mixed Land Use project is meant for forestry and forest conservation, not agriculture. Because of this, Kikuube District rejected Hoima Sugar’s conversion of Bugoma Forest yet NEMA allowed the company to proceed with the commencement of sugarcane growing, directly contravening the Physical Planning Act.
Officials from the sugar factory were not available for comment by press time