Another East African pipeline faces ESG challenges

Turkana County authorities have continued to fight Kenya’s government over land acquisition for the oil pipeline component of the LAPSSET project

WHAT: Nairobi is at odds with the Turkana County administration over land acquisition for the LLCOP pipeline.

WHY: The midstream project is the key to unlocking oil production in the South Lokichar basin.

WHAT NEXT: If the land acquisition dispute gains more attention on the global stage, the Kenyan government’s effort to move the project forward may stall.

ESG (environmental, social and governance) issues are already having a disruptive impact on East Africa’s midstream sector. As NewsBase has reported previously, several commercial banks and export credit agencies have decided against supporting the East Africa Crude Oil Pipeline (EACOP) since a group of more than 200 non-governmental organisations (NGOs) launched a public campaign designed to draw attention to the project’s impact on local ecosystems and greenhouse gas (GHG) emissions.

But ESG issues aren’t just gaining prominence because of campaigning by NGOs. They’re also arising on the local level, as a consequence of efforts to protect the interests of local and indigenous communities – as developments surrounding the oil pipeline component of the Lamu Port-South Sudan Ethiopia Transport Corridor (LAPSSET) initiative demonstrate.

These efforts have been spearheaded by the government of Turkana County, which is lobbying against the government’s approach to land acquisition for the Lokichar-Lamu Crude Oil Pipeline (LLCOP) project. County authorities have already failed in their bid to make the court system, rather than county and national governments, responsible for the land acquisition process. Nevertheless, they are still working to block the pipeline, on the grounds that it threatens local interests.

It remains to be seen whether the county’s objections to LLCOP ultimately have the same impact as the NGO campaign against EACOP. They may not, if they do not end up drawing the same level of international attention as the latter.

Land acquisition issues

So far, the topic has mostly drawn interest from Kenyan press agencies, which reported recently that Josphat Nanok, the governor of Kenya’s Turkana County, and James Lomenen Ekomwa, a member of Kenya’s Parliament representing Turkana South, had criticised the government’s approach to acquiring land for LLCOP.

Nanok recently alleged that Kenya’s National Land Commission (NLC) had begun acquiring land on behalf of the State Department of Petroleum and Mining in violation of the country’s constitution and existing body of law. More specifically, he charged that NLC had impinged upon local authorities’ rights in the process of laying the groundwork for LLCOP.

“The county government is the custodian of the community land and must be included in such processes like compulsory land acquisition,” he was quoted as saying by the Nation daily newspaper. He urged Nairobi to consult more closely with the county administration, saying that this approach would be more fruitful than holding “small meetings” with few local officials in attendance.

The governor also called on the government to hold some of its consultations on the pipeline outside the country’s major urban centres in order to accommodate local officials. He also called attention to Turkana County’s plan to establish a land registrar, saying that this step would allow the parties to discuss the matter more transparently.

Meanwhile, Lomenen has spoken up in favour of the county administration’s call for suspending land acquisition for LLCOP. Local authorities need more time to set up the land registrar, which will help ensure fair compensation to disadvantaged populations, he said. “[Before] the pipeline passes in our county, we must have title deeds for our land and given value for all trees along the way for compensation,” he was quoted as saying by the Nation newspaper.

He continued: “Land in Turkana County can’t be taken without permission from leaders and locals, as it will remain our land. Our land should only be leased for intended projects for a certain period and reverted to owners, or else we will kill pastoralism in the affected areas.”

Nairobi’s response

Kenya’s government, meanwhile, has responded by pointing out that delaying LLCOP will stymie plans for the development of oil reserves in the South Lokichar basin.

John Munyes, the cabinet secretary of the Ministry for Petroleum and Mining, recently stressed that Kenya needed LLCOP, which will follow an 892-km route from Lokichar to the Indian Ocean port of Lamu, to move crude to market. If oil does not flow, he remarked, the government cannot distribute funds according to the provisions of the 2019 Petroleum (Exploration and Production) Act, which calls for national, county and local governments to receive 75%, 20% and 5% of all revenues respectively.

Munyes also described Turkana County as the last remaining obstacle to land acquisition for LLCOP, noting that NLC had already completed this process in Lamu, Garissa, Meru, Isiolo and Sambu counties. “I wonder why local leaders are talking of delayed benefits, yet for the country to commercialise crude oil so that we get profit out of it, we must have land to lay a pipeline from Lokichar to Lamu, which assures us of 80,000 barrels [per] day,” he said. (The pipeline’s projected capacity will be 80,000-100,000 barrels per day, or bpd.)

He also indicated that the midstream project would help determine whether oilfields in the South Lokichar basin ever produced at full capacity. The government is hoping that these deposits eventually yield 150,000 bpd, he noted.

Into the spotlight?

This matter is far from settled. Kenya’s government has shown that it is keen to push LLCOP forward, and Turkana County authorities have demonstrated that they are willing to continue their fight against the project.

Thus far, though, the dispute between the two sides has not drawn much attention outside East Africa. Western press agencies covering LLCOP (itself a project with a lower profile than EACOP) have made the occasional mention of disagreements over land acquisition in Kenya, but they have generally not gone into much detail. Likewise, Western NGOs such as Greenpeace, which was one of the signatories of the open letter that led some banks to reconsider funding for EACOP, have not taken up Turkana County’s cause.

It remains to be seen whether the situation changes – that is, whether the LLCOP land disputes start attracting notice outside the region. They may not, given that the Lokichar-Lamu link has a lower profile and a lower price tag, $1.5bn, compared with $5bn for EACOP. But if they do – if, say, the project draws the attention of groups that lobby for indigenous communities’ rights – Nairobi may end up contending with the court of public opinion as well as the Turkana County government.