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Tullow free to exit after concluding tax talks

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By NJIRAINI MUCHIR & HALIMA ABDALLAH

Kampala. British Oil firm Tullow is set to formally exit active operations in Uganda, after agreeing to a payment plan for taxes on its farm-down to Total E&P.
The company agreed to pay $167m in capital gains tax to Uganda Revenue Authority (URA), clearing a hurdle that government had erected for consent to its exit plans.

The development follows close to two years of haggling over the tax.
Initially, URA assessed the tax at $300m over all of Tullow’s assets valued at $900m, but the oil firm said that the transaction wasn’t taxable.

Since then, there have been negotiations over the amount, which finally came down to $167m.
Last month Tullow Oil and Total E&P chief executives and President Museveni met in Entebbe where outstanding issues on the disputed tax were resolved.

Although the tax matter was in respect of Tullow, Total took a hand in order to help reach a conclusion.
Sources familiar with the matter said Total agreed to meet part of the tax without giving a breakdown.
“Tullow has agreed on the principles of the capital gains tax on its $900m farm-down to CNOOC [China National Offshore Oil Company] and Total. The government and partners are now engaged in discussions to finalise an agreement reflecting this tax treatment that will enable the completion of the farm-down,” notes published along Tullow’s 2018 full-year results, read in part.
On January 1, 2017, Tullow announced it had signed a sale purchase agreement with Total E&P to transfer 21.57 per cent of its 33.33 per cent stake in the joint venture partnership, which includes CNOOC. Tullow will now own a stake of 11.7 per cent.
In March 2017, Tullow experienced the first hurdle in the bid to sell its shares to Total when CNOOC exercised its pre-emption rights and demanded half of the shares that were traded to Total after the parties had concluded agreements. The process was restarted to accommodate CNOOC’s demands.

That was the easy part. The difficult part was how CNOOC and Total would operate blocks formerly under Tullow. That discussion was lengthy and was only resolved after government mediated between the two.
In the meantime, Tullow applied for a private ruling to understand whether the proposed transaction was taxable.
URA responded in the affirmative and went on to assess the taxes, which resulted in a disputed amount.
“The Tullow farm-down has been resolved; so it is no longer an issue,” said Mr Peter Muliisa Uganda National Oil Company legal officer.

Uganda has 6.5 billion barrels of oil, with between 1.4 billion and 1.7 billion recoverable in the 40 per cent explored areas of Albertine Graben.
When the farm-down is finally over, Tullow anticipates to receive a cash payment of $100m.
Another $108 million has been deferred for the pre-completion period. A further $50 million of cash consideration will be received upon the final investment decision.
Tullow will reinvest the remaining money in the upstream operations and the East African Crude Oil Pipeline as its share contribution.

Tullow planned to sell a greater stake in Uganda so as to free financial resources to enable it to continue with its operations in Kenya.
This development implies that Tullow will spend a small fraction of its planned $570 million African investment this year in Uganda.

In Kenya
In Kenya, Tullow plans to reach a final investment decision on the South Lokichar basin by the end of 2019, with a projected production for 2022. This, however, will require several key milestones stones, including land acquisition, commercial frameworks and contract wards. An exploration appraisal confirmed that the South Lokichar basin contains 240 million to 560 million barrels of oil, with 1,230 million barrels recoverable.

-Daily Monitor

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WITNESS RADIO MILESTONES

Uganda: Land-grab victim communities will join counterparts in commemorating the 2024 International Day of Struggle Against Industrial Plantations.

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By Witness Radio team.

On September 21, 2024, land-grabs communities under their group, the Informal Alliance for communities affected by irresponsible land-based investments in Uganda for the first will join fellow victims in commemorating the International Day of Struggle Against Industrial Plantations, highlighting the growing threat posed by large-scale monoculture plantations.

These industrial plantations have led to the forced eviction of millions of people across Uganda, displacing indigenous communities and stripping them of their land rights and livelihoods. Driven by multinational companies and government-backed investors, with the support of government and private security entities, these evictions prioritize profits over people.

Among the many Ugandan communities still suffering the devastating impact of monoculture plantations are over 30,000 people who were violently displaced from the Namwasa and Luwunga forest reserves between 2006 and 2010 to make way for the New Forests Company’s pine and eucalyptus plantations. In addition, thousands of local and indigenous communities were illegally evicted to make way for palm oil plantations in Kalangala district. Nearly 4,000 people had their land grabbed by the Formosa tree planting company in the Mubende district, and over 35,000 were displaced in Kiryandongo to make way for industrial agriculture to grow maize, soybean, and sugarcane plantations, among others. These and other affected communities united and formed the Informal Alliance for Victims affected by irresponsible land-based investments to defend their rights in early 2019.

The International Day of Struggle Against Industrial Plantations was first celebrated on September 21, 2004, during a community network meeting fighting against industrial tree plantations in Brazil. Since then, it has become a day when organizations, communities, and movements worldwide come together to celebrate resistance and raise their voices, demanding an end to the relentless expansion of industrial tree plantations.

In Uganda, on Saturday, September 21, the 2024 commemoration will start with a radio program in a local dilect (Luganda) purposely to highlight weird experiences faced by communities displaced by large-scale monoculture plantations, struggles for justice, and holding companies and financiers accountable. A one-hour radio program starting at 10 a.m. EAT will feature leaders of the loose alliance. Listen to the radio program on Witness Radio platforms on the website www.witnessradio.org or download the Witness Radio App on playstore.

Later, land-grab victims in Uganda will join their colleagues from Africa and other countries around the globe in a webinar meeting aimed at fostering organizations’ and rural communities’ connection across member countries and communities to build confidence, share experiences, strengthen our campaign to reignite hopes and forge a bond of understanding between the Informal Alliance and victim communities shattered by destructive plantations as well as deterring future plantations expansion.

The Webinar will start at 3PM EAT and will be aired live on Witness Radio platforms on the website www.witnessradio.org or download the Witness Radio App on playstore.

Please note: Both the radio show and Webinar will be live on Witness Radio on www.witnessradio.org or download the witness radio app on playstore to listen live.

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WITNESS RADIO MILESTONES

Uganda: CSOs claim Agilis Partners forcibly evicting local communities to pave way for agribusiness; company did not respond

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Witness Radio and its partners have alleged that thousands of people from local and Indigenous communities have been forcefully evicted from their land to make way for Agilis Partners Limited’s large-scale farming operations, in violation of international human rights law.

They have raised concerns about severe human rights abuses including forced evictions and lack of prompt, fair, and adequate compensation; violations of Indigenous peoples’ right to free, prior, and informed consent; abduction, arrest, torture, and judicial harassment of human rights defenders, and alleged sexual violence against women and girls, as well as other negative social and environmental impacts.

Witness Radio and its partners representing PAPs have written to Agilis Partners on several occasions seeking a dialogue between the company and people who have been harmed however, the company has not responded to their communications.

In a letter to Agilis Partners in June 2024, 36 civil society organizations called on Agilis Partners and its financial backers to take immediate action to stop the human rights abuses and harassment committed against community members, engage in dialogue with the communities, and restore the lands to the people that have been displaced.

We invited Agilis Partners to respond to the letter, the company did not respond.

Company Responses

Agilis Partners. No Response.

Source: business-humanrights.org

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DEFENDING LAND AND ENVIRONMENTAL RIGHTS

Breaking: Witness Radio and Partners to Launch Human Rights Monitoring, Documentation, and Advocacy Project Tomorrow.

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By Witness Radio Team.

Witness Radio, in collaboration with Dan Church Aid (DCA) and the National Coalition for Human Rights Defenders (NCHRD), is set to launch the Monitoring, Documentation, and Advocacy for Human Rights in Uganda (MDA-HRU) project tomorrow, 22nd February 2024, at Kabalega Resort Hotel in Hoima District.

The project, funded by the European Union, aims to promote the protection and respect for human rights, and enable access to remedy where violations occur especially in the Mid-Western and Karamoja sub-regions where private sector actors are increasingly involved in land-based investments (LBIs) through improved documentation, and evidence-based advocacy.

The three-year project, which commenced in October 2023, focuses its activities in the Mid-Western sub-region, covering Bulisa, Hoima, Masindi, Kiryandongo, Kikuube, Kagadi, Kibale, and Mubende districts, and Karamoja sub-region, covering Moroto, Napak, Nakapiripirit, Amudat, Nabilatuk, Abim, Kaabong, Kotido, and Karenga districts.

The project targets individuals and groups at high risk of human rights violations, including Human Rights Defenders (HRDs) and Land and Environmental Defenders (LEDs). It also engages government duty bearers such as policymakers and implementers in relevant ministries and local governments, recognizing their crucial role in securing land and environmental rights. Additionally, the project involves officials from institutional duty bearers including the Uganda Human Rights Commission (UHRC), Equal Opportunities Commission, and courts, among others.

Representatives from the international community, faith leaders, and business actors are also included in the project’s scope, particularly those involved in land-based investments (LBIs) impacting the environment.

The project was initially launched in Moroto for the Karamoja region on the 19th of this month with the leadership of the National Coalition for Human Rights Defenders (NCHRD).

According to the project implementors,  the action is organized into four activity packages aimed at; enhancing the capacity and skills of Human Rights Defenders (HRDs) and Land and Environmental Defenders (LEDs) in monitoring, documentation, reporting (MDR), and protection, establishing and reinforcing reporting and documentation mechanisms for advocacy and demand for corporate and government accountability;  providing response and support to HRDs and marginalized communities; and lastly facilitating collaboration and multi-stakeholder engagements that link local and national issues to national and international frameworks and spaces.

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