Land row, public participation concerns cloud refinery project

Dangote Group President Aliko Dangote and President William Ruto unveil a plaque during the Sh2.2 trillion refinery groundbreaking in Lamu on September 30. [PCS]

The Dangote refinery in Lamu has started on a footing that has derailed or even felled several major projects in Kenya, including some that were planned for Lamu County — with land acquisition, compensation, public participation, environmental approvals and court challenges emerging as the first hurdles for the Sh2.2 trillion project.

Already, there is grumbling from some residents who filed a case in court challenging the project over land ownership and compensation. The Malindi Environment and Land Court ordered that the status quo be maintained on the disputed land pending the hearing of the case on October 14. The order did not stop yesterday’s groundbreaking ceremony, but it places restrictions on activities on the disputed parcel pending the inter partes hearing.

Other than land ownership and compensation, there are also concerns about public participation, which many say was not conducted in a meaningful way before the commencement of the project, which was decided on in July and broke ground only two months later.

There are also queries about whether Dangote has received the required regulatory approvals, including a NEMA Environmental Impact Assessment (EIA) licence, which is issued after comprehensive studies on a project’s impact on the environment and community have been lodged with the National Environment Management Authority (NEMA). Nema states that an EIA must be undertaken before commencement of a project and that a proponent must obtain an EIA licence before commencing the project.

The concerns echo past projects across the country that have failed to take off and investors abandoning them. Lamu has had its share of tussles between project proponents and local communities.

These include the $2 billion (Sh260 billion at the current exchange rate) Lamu Coal Power Plant project and the Sh22 billion Baharini Wind Power project.

The Lamu Coal Power project, which was a Vision 2030 flagship project, was expected to have a power-generating capacity of 1,050 Megawatts (MW). The project, however, faced resistance from communities over the impact it would have on the environment and public health. The project was also seen as one that would significantly increase Kenya’s greenhouse gas emissions as well as threaten the Lamu ecosystem, a UNESCO World Heritage Site.

Save Lamu, a coalition of civil society organisations from the county, lodged a case in court rejecting the project on the basis that the project proponent — Amu Power — had not undertaken proper public participation and that the project would harm both the people and the environment.

In 2019, the National Environmental Tribunal revoked the plant’s licence issued by NEMA. Amu Power appealed to the Malindi Environment and Land Court, which upheld the tribunal's cancellation of the licence.

The Baharini Wind Power project, which was set to be built at Mpeketoni in Lamu, faced similar challenges. The project, proposed in 2011, had progressed slowly albeit steadily, getting all approvals and signing a Power Purchase Agreement (PPA) with Kenya Power in February 2020. It, however, faced major setbacks in the months that followed, following disagreements with the project-affected persons, and in July 2020, the Lamu County Assembly voted to nullify the project due to unresolved community and resettlement disputes.

Despite the concerns raised by a section of Lamu residents, President William Ruto yesterday said he would ensure the success of the project, terming people against the project as extortionists.

“I have seen people telling us to give Dangote conditions,” he said, adding that Kenya lost when it placed hurdles for Dangote when he tried to set up a cement production plant, which saw him venture into Ethiopia, which incentivised him rather than giving the investor conditions.

“In Ethiopia, the government guaranteed to buy fertiliser from the Dangote plant for 10 years. That is how he made that investment. Here in our country, we are saying that we should give conditions to the investor. I am asking us to stop these games. Investors are partners with us in the development of this country. They are not our enemies; they are our friends.”

“I want to assure you (Dangote)... nobody is going to extort anything from you,” said Ruto, adding that nobody will get anything “for free because they have blackmailed the system”, terming those who have lodged the court case seeking to stop the project as extortionists.

President William Ruto with Dangote during the groundbreaking of the Sh2.2 trillion East Africa Petroleum Refinery in Lamu. [PCS]

President Ruto, however, acknowledged the concerns of Lamu residents, including compensation and environmental protection, which he said would be addressed.

“The people of Lamu, you are entitled to ask what this will mean for you. Who will get the jobs, will local businesses win contracts, what will happen to the land, will our fishermen keep their livelihoods, how will our water, coastline, mangroves, heritage be protected,” he said.

“All these questions are valid and they are not obstacles to development. They are questions that responsible development must answer. Land matters will be handled lawfully and fairly, environmental and social impacts will be assessed vigorously and the safeguards we agree on will be enforced during construction and operation.”

The matters that he said will be addressed are, however, part of the statutory process that must be dealt with as the project moves from planning into implementation. The land question is particularly significant, with compulsory acquisition requiring gazettement, inquiry and compensation processes before possession is taken. Kenyan courts have repeatedly treated these steps as central to the legality of compulsory acquisition.

The same applies to environmental and social impact assessments (ESIA), where the Environmental Management and Coordination Act (EMCA) and related regulations require project proponents to undertake environmental assessment before commencement of projects that require it.

The assessments identify both positive and negative impacts that a project will have on the environment and community, while providing mechanisms for mitigating negative impacts. NEMA also requires public consultation as part of the EIA process.

Dangote has acknowledged the hurdles that the Lamu refinery faces and on Tuesday this week said that while the groundbreaking would go ahead, his firm would pause work at the site until the court gives further directions on October 14.

But even as he termed the development in the courts as “normal for us in Africa” and said he was confident that the project would proceed, at the groundbreaking on Wednesday, he also noted that he was ready for a fight.

“We have travelled that road before. We know it will not be easy. There will be challenges. You must have seen one yesterday. We are not scared of people taking us to court. Anybody who wants to cause trouble, we are ready for his trouble and we will give him a headache,” he said but also added that the firm will develop the project responsibly.

“Industrialisation must have a human face... because Lamu is a place of extraordinary environmental, cultural and historical importance; development must come with responsibility. We will work with authorities, communities and experts to ensure that this project is developed to a high standard of safety, environmental responsibility and community engagement.”