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Why Atiak Sugar Project is not firing on all cylinders.

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Photo Credit: Daily Monitor.

Ms Amina Hershi, the chief executive officer of Horyal Investment Ltd, displays some of  the bags of sugar produced at Atyak Sugar Factory in Amuru District recently.

Atiak Sugar Limited is battling an acute shortage of sugarcane to supply the multi-billion sugar factory located in Atiak Sub-county, Amuru District. The vast bulk of its sugarcane plantations in both Amuru and Lamwo districts were ravaged by suspected arson attacks from alleged aggrieved members of two separate outgrowers societies.

The Atiak Sugar Project is still being spoken of in the present tense. It is essentially a public-private-community partnership between the National Agriculture Advisory Services (Naads), participating farmer cooperatives and respective local governments of Amuru, Lamwo and Horyal Investment Holdings Ltd.

The first bags of sugar from Horyal Investment Ltd’s multi-billion investment in the post-conflict north hit the streets of Gulu City once President Museveni commissioned the factory on October 22, 2020. The factory was initially meant to provide a ready market for the sugarcane outgrowers in the region where sugar production has already begun.

Under the partnership, the community under Atiak Outgrowers and Gem-pachilo Cooperative Societies are to plant cane on the land and weed the plantations. Once the cane is ready, the plantation—apportioned to the outgrowers by Naads—would be harvested and sold to the factory.

At its inception, the project targeted to cover 13,841 acres at the main plantation at Atiak in Amuru District. An expansion of 15,000 acres was, however, later made in Ayu-alali, Palabek Kal Sub-county, Lamwo District, in 2020. A further expansion of 31,159 acres is planned and is being established in Palabek-ogili, Lamwo District, bringing the total acreage to 60,000.

In September 2020, before its commissioning, Ms Amina Hershi, the chief executive officer of Horyal Investment Ltd, told a delegation of government officials that 3,000 acres of sugarcane were ready for supply to the factory to begin its maiden production. This section of the plantation belonged to Gem Pachilo and Atiak Outgrowers Cooperative Societies, she revealed, adding, “…we also now produce 6 MWh of electricity to the national grid, which is generated through biogas from the bi-products of the cane.”

At this point, the plant was, according to Ms Hershi, only waiting for calibration by the International Organisation for Standardisation to ensure the quality, safety, and efficiency of products, services, and systems.

Two years later, however, Saturday Monitor has learnt that simultaneous incidents of fire outbreaks that ravaged hundreds of hectares of the plantation appear to cast a dark shadow on the potential of the factory.

Outgrowers and the factory’s management accounts have indicated that since 2017, wildfires have gutted hundreds of hectares of the sugar plantation in the dry season. The burnt portions were usually canes that were nearing harvest or ready for harvest. We also understand that the portions burnt by the fire were always those owned by the outgrowers. These were not insured against fire, damages, or any other risks.

Late last month, the proprietors of the factory said sugar production had been suspended after cane supply to the factory hit rock bottom. According to the company, the suspension comes in the aftermath of wildfires that have in previous months destroyed the sugarcane plantation.

Mr Mahmood Abdi Ahmed, the company’s director for plantation and agriculture, told Saturday Monitor that production had drastically slowed down. He, however, hastened to add that operations haven’t been suspended as a result of the acute shortage of canes.

“The biggest challenge we have had is the gaps in our structural planning relating to the sugarcane production, and this failure is blamed on all of us the stakeholders,” Mr Mahmood said in an interview, adding, “The land (customary) ownership setup in the Acholi area has served a really big disadvantage to sugarcane growing because you don’t see people growing sugarcane on subsistence basis as we see in other regions producing sugar.”

According to him, in areas such as Busoga and Bunyoro sub-regions, “you find people growing sugarcane everywhere because the land is not communally owned and individuals decide on their own whether to grow sugarcane. But the communal ownership disfavours this, and this is one challenge we did not foresee.”

He also said the lack of associated amenities such as roads and urban trading centres where interested labour (workers) can reside has exacerbated things.

“The road infrastructure in communities here is still poor to boost sugarcane production,” he said, adding, “Even if communities grew these canes, the road networks are still underdeveloped to ease transportation of the canes.”

 The company also lacks the infrastructure and human resources to deploy in sugarcane production. For example, Atiak Town Council or Elegu Town Council— the nearest trading centre—is 25km away from the factory, making transportation of the labour force over the distance a huge daily burden.

A fortnight ago, Ms Hersi told the media that the factory was temporarily suspending operations. According to her, the factory’s biggest problem was the lack of canes to supply the plant to produce sugar. She was, however, quick to add that the plantation would resume production once canes in Ayu-alali plantation in Palabek-kal Sub-county, Lamwo District, mature between July and August.

Sabotage galore

Ms Joyce Laker, the chairperson of Atiak Outgrowers Cooperative Society, however recently revealed that they were disappointed that Naads refused to pay their members.

During a public gathering at the factory, Ms Laker described the wildfires that swept across the plantations as deliberate sabotage. She also called for the government’s intervention after revealing that discontented cooperative members have openly threatened to continue burning down the sugar plantation until their grievances are settled.

“I will say it without shame…,” she stated. “…there are issues which the government has to come in and settle because at one point, in a meeting, some people said if these issues are not resolved, the sugarcane will continue getting burnt down.”

The longstanding dispute between the sugarcane outgrowers and the management of the sugar factory did not only delay the commencement of sugar production. Saturday Monitor also understands that the dispute has reportedly caused persistent and deliberate burning of the canes.

Ms Laker said the finger of blame can also be pointed elsewhere.

She referred specifically to the 2017 incident when Naads cut down more than 160 acres of sugarcane plantations belonging to Atiak Outgrowers and Gem-pachilo cooperative societies.

Saturday Monitor has established that the outgrowers are yet to be paid. We have also established that there are several instances of tension between the outgrowers, Horyal Investment Ltd and Naads over royalties and accumulated payments for canes cut and served to the factory.

Before President Museveni launched the factory in October 2020, the farm could not initialise sugar production for nearly eight months. This was due to the failure of the government to compensate two cooperatives for the sugarcane supplied to the factory.

Ms Grace Kwiyocwiny, the State Minister for Northern Uganda, told Saturday Monitor that roundtable talks between the leadership of the factory and the cooperative members are in the offing.

“We should protect all the little developments that are coming up in our region because all developments are supported by communities,” she said, adding, “I want to … come and meet with the leaders of the community because of the sugar [cane] that is continuously burning down.”

Earlier in March, when this newspaper visited the facility, the factory remained closed to production due to supply chain issues (shortage of cane). A perfect storm—including the pandemic, suspected arson attacks and insufficient production of canes by plantations in both Amuru and Lamwo districts—has contrived to create supply chain problems.

No respite from the east

In January 2021, Horyal Investment Ltd started sourcing its cane from the Busoga Sub-region. Sugarcane farmers in Busoga Sub-region, under the Greater Busoga Sugarcane Farmers’ Union (GBSGU), last month signed a memorandum of understanding with Atiak Sugar Factory to supply cane for six months. Under the arrangement, the government shall intervene by subsidising the transport costs and also avail fueled trucks to ferry the cane.

Inside sources have, however, told Saturday Monitor that the arrangement looks to have fallen flat on its face. The cost the investor incurred in transporting a truckload of canes is six times higher than what it paid for canes alone. A source who did not want to be named said while a truckload of canes fetched approximately Shs200,000, it costs between Shs800,000 to Shs1m to transport the consignment.

“They failed to sustain that arrangement because it was very expensive and the company realised it was sinking in losses to that effect; although the costs were being shared between the investor and Naads,” our source revealed.

Mr Michael Lakony, the Amuru District chairperson, fears that the suspension of the sugar production will destroy livelihoods in the sub-region.

“Hundreds of workers, including young men and women from the district here have been rendered jobless,” he told us in an interview, adding, “If the company wants to gain from the factory, it should get serious other than politicking.”

Mr Lakony added that because the government was allegedly not serious about streamlining the impasse and ensuring that Horyal Investments Ltd respects its terms in dealing with the outgrowers, the investor could continue grappling with suspicious fires.

“The plantations keep getting burnt because it is owned by no one and that means nobody cares, and if nobody cares, no one takes interest in taking care of it, including the neighbours because benefits in terms of payments to the out-growers are not being met,” he said.

Mechanisation drive

To address the challenge of labour deficiency and lack of funds to establish low-cost housing facilities in the factory to accommodate workers, Mr Mahmood said they are moving towards mechanising production.

“We don’t have the financing to build accommodation facilities to house thousands of workers who we would need to work on the plantation daily,” he told Saturday Monitor, adding, “Instead, we are strategising to focus on mechanising our production using the limited resources at our disposal now.”

He further revealed that they have procured a new fleet of sugarcane planters, weeders and harvesters due to arrive at the back-end of this year.

“The machines, we believe, are more efficient and can do much more work compared to human labour and that will solve the puzzle,” he noted.

Although Mr Mahmood did not disclose the source of the funding, in a separate interview, Mr Lakony—the Amuru LC5 chairperson—said the company had been granted a Shs108 billion bailout by the government for mechanising production.

“We had a meeting with the management as a district and also shareholders and the latest update is that the government has allocated Shs108 billion to the company through UDC [Uganda Development Corporation],” Mr Lakony said, adding, “The plan is to leave rudimental and turn to mechanised production. Instead of using human labour, they want to use machines.”

A fraction of the same funds will also be used to establish an irrigation system on River Unyama that cuts through the sugar plantation to help in irrigating the canes during the dry season when immature and young canes dry and die out, Mr Lakony added.

Saturday Monitor understands the Shs108 billion is the same funding thrown out by Parliament’s Budget Committee last November. This was after the investor made a supplementary budget request to finance production. The request tabled by junior Trade minister David Bahati, and backed by the UDC’s top brass, failed to convince the lawmakers, who in turn sent them away.

The MPs declined to endorse Ms Hersi’s request to the government, reasoning that there was a need for proof that her investment was making a substantial contribution to the economy. The MPs instead demanded a forensic audit into how she has spent more than Shs120 billion received from the government. Similar financial requests were made by the Atiak Sugar leadership to the 10th Parliament, but most of them were rejected, although it later emerged that they were, nevertheless, granted.

Some of the fire incidents at Atiak Sugar project

In 2016, a fire caused an estimated loss of Shs150m after it gutted 150 acres of sugarcane plantation at the factory.

In December 2018, another mysterious fire destroyed an estimated 250 acres of sugarcane at the facility.

An estimated 600 acres of sugarcane at the plantation was then burnt down in February 2019.

And in January 2021, a fire that lasted for nearly a week destroyed nearly 60 percent of the plantation after the police fire brigade fought it with little success.

Eventually, more than 600 acres of sugarcane estimated at Shs3 billion were reported to have been destroyed in the fire.

In fact, that fire in January of 2021 was the worst to ever hit the plantation. The police attributed the rapid spread of the fire to narrow fire lines that do not allow fire trucks to move in fast.

Enter January of 2022, a similar fire burnt down an estimated 3,500 acres of the sugarcane plantation.

According to Mr David Ongom Mudong, the Aswa River Region police spokesperson, the fire razed down 14 huts belonging to a Uganda People’s Defence Forces (UPDF) detachment. The soldiers, who were supposed to stand as sentinels at the plantation, watched helplessly as 250 acres were burnt down.

Background

About the factory

Atiak Sugar Factory, located at Gem Village in Pachilo Parish in Atiak Sub-county in Amuru District, is jointly owned by the Uganda and Horyal Investment Holdings Company Ltd. The latter belongs to Ms Hersi.

The factory—located 17kms north of Atiak off the Gulu-Nimule Road—is the first major investment in the region.

Lawmakers have, however, continued to question why the government’s stakes in it have remained significantly low compared to that of Horyal Investments despite the huge capital portfolio injected in the past years into the venture.

Last September, Parliament’s Committee on Trade questioned why the government—the lowest shareholder in Atiak Sugar Limited—continues to invest the most money in the factory.

The government’s shareholding in the plant has remained static at 40 percent despite an injection of more than Shs120 billion.

In May 2018, when the government injected Shs20 billion, its shareholding stood at 10 percent. In the same year, it injected another Shs45 billion—raising its shares to 32 percent.

The committee also questioned the circumstances under which Naads contracted the company to clear, plant, and harvest sugar cane valued at Shs54 billion instead of working directly with the outgrowers.

Source: Daily Monitor

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Six cattlemen opposed to the Tilenga oil project-related forced land eviction have been granted bail but will remain in prison…

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By Witness Radio team

A magistrate court sitting in Hoima City in mid-western Uganda has granted bail to six cattlemen but, will remain in prison due to other criminal charges framed against them.

The six cattlemen are part of a group of over 20 cattlemen that have been slapped with multiple criminal charges by the Hoima City resident state attorney for opposing an illegal land eviction that is taking away their grazing land for the Tilenga Feeder Pipeline Component.

They are part of a larger community of 2500 people that have legally occupied and cultivated their land measuring 1294.99 hectares at Kapapi North, Kapapi Central, Waaki North, Waaki South, and Lunga villages in Kapapi and Kiryatete sub-counties in Hoima District since the 1950s, which is gazetted as public land.

This follows Witness Radio – Uganda’s intervention with its legal team to provide criminal defense to victims of irresponsible oil investment. The majority of the cattlemen in prison were arbitrarily arrested, maliciously charged, and sent to prison a few days before a violent and forceful land eviction.

On 10th February 2023 at 1:00 am, Hoima District Police, soldiers from Uganda People’s Defense Force (UPDF), with the assistance of security guards from Magnum, a Private Security Company descended on the community violently and illegally evicted them without a court order.

Kataza Samuel is granted bail on both charges of malicious damage to property and stealing cattle; Mulega Eria on both charges of criminal trespass and stealing cattle, Karongo Stephen on both threatening violence and stealing cattle; Rangira Stephen on both threatening violence and stealing cattle; Karongo Edward on both charges of theft and stealing cattle while Mbombo Stephen has been granted bail on threatening violence charge.

On a sad note, the six plus other cattlemen in prison cannot get out and enjoy their freedoms because they are still facing many criminal charges namely assaulting Tilenga Feeder Pipeline Component workers, new charges of threatening violence, and malicious damage to property among others.

Each of the victims was granted a cash bail of one million shillings (1,000,000=) about 273.9 US dollars on their first charge while on the second charge, each was granted a cash bail of three hundred thousand Shillings (300,000=) about 80.43 US Dollars. Sureties were conditioned to a noncash bail of twenty million shillings about 5,479.4 US dollars.

According to the 2022 bail guidelines, if an offense is triable by both the High Court and Magistrates Court and the accused person has been on remand for 60 days before the commencement of trial, the person shall be released on bail on such conditions that the court considers reasonable.

Bail conditions; court ordered the six to report back for their bail on the 20th of June 2023.

However, bail applications for other criminal charges have been fixed to be heard on the 2nd of June 2023 by different trial magistrates.

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Persecution: The prosecutor’s office is turned into a tool to harass locals for opposing land grabs to give way to the oil project in Mid Western Uganda.

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By Witness Radio team,

Mr. Karongo Edward, a smallholder farmer in Kapapi village, is one of the dozens of local farmers slapped with multiple criminal charges by the Director of Public Prosecution’s office in Hoima district, Western Uganda because they are resisting an illegal eviction to give way to Tilenga Feeder Pipeline Component.

Arbitrarily arrested on the 25th of January 2023 between 15:00 and 15:30 EAT at Kapapi trading center by two armed police officers attached to Kigolobya police station under the command of one Ndahura Gafayo, now he faces three separate criminal files from criminal trespass, assault to stealing cattle and he’s likely to face more charges resulting from his opposition to an illegal land eviction to give way for Feeder Pipeline Component of the Tilenga Project.

According to his family, Kalong was not informed about the reasons for his arrest instead, he was grabbed, handcuffed, and bundled into a private car with registration number UAT 135J.  He was driven to Kigorobya police, where he spent a night before being transferred to Kitoba police station on the 26th, the following day.

Karongo is one of the 2500 people that have legally occupied and cultivated their land at Kapapi village, Kapapi Sub County, in Hoima District since the 1950s, which is gazetted as public land. No sooner had Karongo and other local farmers been imprisoned than their land was grabbed at gunpoint in the wee hours of the night without a court order.

According to the locals, as soon as the news started circulating that Kapapi North, Kapapi Central, Waaki North, Waaki South, and Lunga villages’ land had been identified as suitable for the oil project, people masquerading as landlords emerged and started ordering and threatening locals to vacate their land.

On the 10th of February 2023, over 2500 locals were forcefully and violently evicted from 1294.99 hectares of their land with no compensation or resettlement.

The eviction was spearheaded by Ndahura Gafayo, Aston Muhwezi, David Mpora, Monica Rwashadika, one Agaba, Wilber Kiiza, and Moses Asimwe with full backup from the area police, soldiers from Uganda People’s Defense Forces (UPDF), and security guards from Magnum, a private security company.

Many adults and children were severely beaten and wounded, women are alleging being raped, and houses were set ablaze. In contrast, others were destroyed, animals were slaughtered, and others were looted. Evictors and their agents looted properties worth millions of Uganda Shillings.

As Witness Radio writes this report, dozens of local farmers opposed to forced land evictions to benefit the Tilenga oil project are facing multiple criminal charges and currently remain at Hoima government prison.

Below are tables drawn to showcase files, names of prisoners (locals from Kapapi opposed to forced land eviction to give way for the Tilenga oil project), court file numbers, and their charges;

File No. 1

Name Court File Number Charge
Kataza Samuel 237 of 2023 Malicious damage to property
Mulega Eria 237 of 2023 Criminal trespass
Karongo Stephen 237 of 2023 Threatening violence
Rangira Stephen 237 of 2023 Threatening violence
Karongo Edward 237 of 2023 Theft

File No.2

Name Court File Number Charge
Kataza Samuel 77 of 2023 Stealing cattle
Mulega Eria 77 of 2023 Stealing cattle
Karongo Stephen 77 of 2023 Stealing cattle
Rangira Stephen 77 of 2023 Stealing cattle

 

 

 

 

 

File No. 3

Name Court File Number Charge
Karongo Stephen 238 of 2023 Assault
Karongo Edward 238 of 2023 Assault
Rangira Stephen 238 of 2023 Assault

File No.4

Name Court File Number Charge
Rubyogo David 241 of 2023 Threatening violence
Twinobigezo Edrine 241 of 2023 Threatening violence

File No. 5

Name Court File Number Charge
Mbombo Stephen 60 of 2023 Malicious Damage to property

File No. 6

Name Court File Number Charge
Mbombo Stephen 64 of 23 Threatening violence
Kamugisha Enock 64 of 23 Threatening violence
Murungi John 64 of 23 Threatening violence
Musinguzi Peter 64 of 23 Threatening violence

Witness Radio – Uganda provides criminal defense to victims and has filed bail applications.

 

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Profiting from misery: A case of a multimillion-dollar tree project sold off before resolving land grab and human rights violation claims with local communities.

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By Witness Radio team

In 2002, Global Woods Limited allegedly acquired a 49-year lease on 12,182 hectares where thousands of local communities were deriving their livelihood, forcefully and violently evicted them, and later turned the land into a commercial tree plantation. Before resolving land grabbing, human rights violations and abuse issues with the victim community, the company is sold off. Witness Radio – Uganda has learned.

The monoculture (pine and eucalyptus) tree plantation was certified by the CarbonFix Standard in January 2009, which enables global woods to sell certified carbon credits to interested buyers.

Leveraging on its contacts, the plantation attracted many financiers namely, the British International Investment under the GEF Africa Sustainable Forestry Fund LP managed by Global Environment Facility and Africa Forestry Fund II from Criterion Africa Sustainable Forestry Management, DANIDA, and the European Union among others supported the cause.

Kikonda tree plantation located in Kyankwanzi district has been a beneficiary of the 16 million Euros (over 65 billion Ugx) Sawlog Production Grant Scheme (SPGS) III implemented by the Food and Agriculture Organization (FAO) and the Ministry of Water and Environment.

The five-year project was designed to meet long-term industrial and market demand for sawlog products by establishing commercial plantations and ensuring downstream processing and utilization efficiency of forest resources.

With all resources at its disposal, Global Woods Limited overlooked standards of responsible investments. The company never consulted the pastoralist and farming community occupying the land as they were unaware of the project.

Instead, with support from government security forces including the Uganda Police Force, over 10,000 people were forcefully and violently evicted from their land.

Cries and grief locked more than 30 villages namely; Kakindu, Neeme, Nakibizi, Ngando, Kalungu, Kiwamirembe, Kachwamango, Bulaza, Kyebajojjo, Rwenkonge, Kyambogo, Mbari, Kikonda, Kasambya, Kyiryakye, Kiyigikiwa, Ndaga, Kiteredde, Kyakabuga among others as locals faced extreme violence with no alternative settlement in the then, Kiboga district.

The local population lost homes, and family fields to the company, and dozens of local people were reportedly arrested and slapped with trumped-up criminal charges. Other locals claim that the company workers and their agents looted dozens of animals and different types of grains found in people’s granaries.

Global Woods Limited is also accused of destroying a water dam worth millions of Uganda Shillings at Kigando village constructed in 1992 to provide water to animals of the local farming communities. The construction of the water dam was financed by the Irish Aid from the Irish tax Payers’ money. Land bordering the plantation is allegedly grabbed at gunpoint too. One of the victims who never wanted his name to be mentioned here due to fear of reprisals, reported that he surrendered his 6.879 hectares of land on a private Mailo land tenure to the company without compensation. He further narrated that, as the plantation continues expanding on other people’s land, he fears losing the remaining piece of land too.

Additionally, the neighboring communities claim that they continue losing their animals as a result of chemicals used on the plantation. “Some animals usually come out blind, while others tend to have miscarriages. And at the end, they die.” One of the herders told the Witness Radio team. He further claims that in 2017, he lost over 30 heads of cattle, calling for the regulation of chemical use on the plantation.

Without resolving the harmful impacts caused to the local communities as some highlighted above, Global Woods Limited plantation in Kikonda has been sold to Nile Fibre Board Limited at a cost not yet established by Witness Radio – Uganda.

Global Woods AG is a Germany-based Company founded by a former Green politician from the European Parliament, Mr. Manfred Vohrer. The company has different tree projects in Paraguay and Argentina. Global-woods International remains assisting the Kikonda project in promoting and selling carbon credits.

Recently, Witness Radio – Uganda landed on a document indicating that Criterion Africa Partners, Inc. (“CAP”), a private equity firm investing in the forestry sector in Sub-Saharan Africa, announced that its portfolio company Global Woods AG (“GW”) had completed the sale of its Uganda timber plantation to Nile Fibre Board Ltd. (“NFB”).

“The sale of Global Woods’ plantations to Nile Fibre Board represents a successful outcome for all stakeholders involved,” said Jim Heyes, CAP’s Managing Director responsible for East Africa. “CAP is pleased to hand the reins to a family-owned local company.”

The Nile Fibre Board Limited (NFB) is a subsidiary of Nileply Woods. NFB now holds the FSC Chain of Custody (COC) and FSC Forest Management certificates upon taking over 12,182ha of Kikonda Forest reserve from Global Woods AG.

The Nile fibreboard has a processing plant in the Nakasongola district in Central Uganda, which produces Melamine Faced Boards (MFB) used in the furniture and construction industry. The two companies (Nile Fibre Board Limited and Nile Plywood Board) are owned by the Sarrai Group of Companies.

The Sarrai group owns more than ten (10) other companies. Some are Kiryandongo Sugar Limited, Kinyara Sugar Works Limited, Hoima Sugar Limited, and Tulip properties and others are mentioned in land-grab scandals, causing tens of thousands of indigenous and local communities to landlessness and homeless.

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