Rupa Community: Landmark Uganda Mining Act 2022 CDAs Deal

• The Rupa community in Moroto District finalized a Community Development Agreement (CDA) with Sunbird Resources Limited in 2023 after nearly a decade of negotiations.
• This CDA, distinct from surface rights payments, establishes a trust and investment company to fund long-term projects and commercial activities.
• Commitments include roads, scholarships, a health centre, an irrigation dam, and employment, alongside commercial arrangements for supplying materials.
• Uganda's Mining and Minerals Act, 2022, now legally mandates CDAs for most mineral rights holders to ensure benefit sharing.
• While seen as an opportunity by advocates, some miners worry about the government transferring development responsibilities without clear guidelines.

Community development agreements are supposed to be investment.

For nearly a decade, the Rupa community in Uganda's Moroto District engaged in extensive negotiations to secure benefits from mineral extraction that extended beyond mere payments for land access. These discussions, which commenced in 2014 and culminated in 2023, led to the establishment of a comprehensive Community Development Agreement (CDA) with Sunbird Resources Limited. This company holds a 21-year Large-Scale Mining Licence, permitting the extraction of limestone at a daily rate of 8,000 tonnes within the Rupa Sub-county. The agreement represents a significant effort to ensure that the local population derives lasting value from the mining operations.

Instead of merely distributing funds from mining-related surface rights payments directly to individuals, the Rupa community adopted a forward-thinking strategy. They established both a trust and an investment company, intending to channel resources into long-term projects and foster participation in commercial ventures linked to the mining industry. The commitments outlined in this Community Development Agreement Uganda include vital infrastructure such as roads, the provision of scholarships, the construction of a health centre, and the acquisition of an ambulance. Additionally, the agreement covers an irrigation dam and various employment opportunities, aiming to uplift the community's overall well-being.

Further details of the agreement underscore its long-term vision, including provisions for ten university scholarships annually for a period of 49 years, alongside yearly training opportunities for ten women. Beyond these social investments, the Rupa community has also successfully negotiated commercial arrangements. These include supplying pozzolana to the mining company and actively participating in the production and supply of other mineral-based products, thereby creating direct economic engagement and fostering local enterprise within the Karamoja mining agreements framework.

Geoffrey Odur, a lawyer from GEM Advocates who presented the Rupa experience, characterized this unique arrangement as a deliberate effort to transform mining benefits into sustainable investments for the community, moving beyond individual payouts. He highlighted the challenge of dealing with an "amorphous body" of approximately 43,000 people, which necessitated the community's self-organization. This led to the formation of a trust, complete with a board of trustees, a secretariat, and an annual general meeting, ensuring broad representation from different clans, women, and other community segments. This structured approach is crucial for managing the substantial benefits anticipated from the mining benefit sharing Uganda.

Crucially, the trust also established an investment company, wholly owned by the community institution, specifically to undertake commercial activities. Odur emphasized that "We have transformed that money into projects that are sustainable," further stating that "Community development agreements are supposed to be investment." This innovative model aligns with the spirit of the Uganda Mining and Minerals Act, 2022, which now legally mandates Community Development Agreements for most holders of mineral rights. The Act intends for these agreements to define how mining companies and affected communities collaborate and share the benefits derived from mineral extraction.

It is vital to distinguish between two separate contractual arrangements the Rupa community entered into with Sunbird Resources. A surface rights agreement Uganda specifically addresses access to land and compensation for its use. In contrast, the Community Development Agreement establishes broader development and commercial commitments. Odur stressed that these two should not be conflated, as a CDA is not a substitute for the compensation or payments due to landowners whose property is utilized for mining activities. This distinction is paramount for legal compliance and avoiding future disputes.

The Rupa negotiations unfolded amidst a wider national discourse in Uganda concerning how mineral extraction can genuinely improve the living conditions of people in mining areas. The new Uganda Mining Act 2022 CDAs framework is a direct response to this debate, aiming to formalize benefit-sharing mechanisms. However, a recent gathering of mining industry representatives, legal professionals, government officials, and civil society organizations revealed sharply divergent perspectives on the practical implementation of this legal obligation.

While lawyers and community advocates view CDAs as a significant opportunity to rectify the historical exclusion of mining communities from the wealth generated by mineral resources, some mining operators express reservations. These miners contend that the government risks offloading its own development responsibilities onto private companies without providing sufficiently clear rules or adequate incentives. Kenneth Asiimwe, Chief Executive Officer of the Uganda Association of Artisanal and Small-Scale Miners (UGAASM), questioned the rationale behind expecting companies to shoulder such extensive development burdens.

Despite the promise of the Rupa model, questions persist regarding the actual delivery of negotiated commitments, the number of households currently benefiting, and the long-term financial sustainability of these arrangements over the entire lifespan of the mining operation. These ongoing inquiries highlight the critical need for robust monitoring and evaluation mechanisms to ensure that Community Development Agreements truly deliver on their potential for sustainable development and equitable benefit sharing in Uganda's mining sector.

Lawyers and compliance officers involved in Uganda's mining sector must scrutinize Community Development Agreements (CDAs) under the new Mining and Minerals Act, 2022, ensuring they establish sustainable, verifiable benefit-sharing mechanisms for communities, distinct from surface rights, to meet legal obligations and mitigate future disputes.

Source: Original reporting via industry insights on Ugandan mining.