Kenyan High Court Perspective on Tullow-Turkana

Thursday, 14 November, 2013

An excellent piece on Kenyan news site, Standard Digital, raises many of the issues surrounding the social and legal expectations of an extractive operation. Tullow Oil’s Kenyan Turkana operation was halted last month after the local population protested and blockaded the project, angry at what they perceived as a lack of employment and benefits from the operation.

A lawyer from the Kenyan High Court has elucidated on the complexities a company faces when setting up a project in a foregin country:

“The unfortunate incident of protest by locals expressing dissatisfaction with Tullow’s ‘failure’ to employ enough locals leading to the latter suspending its operations and evacuating its workers brings to fore serious issues relating to security, investment viability and Corporate Social Responsibility (CSR) commitment.”

Her principal concern is one shared by CSR21: expectations. What many miners fail to accommodate are unchecked expectations by local communities, and even governments, about the benefits an operation will bring. Many communities who have no experience of mining operations, possess preconceptions and high expectations of the transformational benefits brought by mining.  But when ambiguities are created over the responsibility of the company in the local area, then local communities are often understandably aggrieved when those hoped for benefits fail to materialize.

"Much as such stalemates are not new to any oil and gas operations world over, I dare say they are avoidable if communities and operators are willing to make certain structured commitments and concessions."

But even when ambiguity is mitigated through official structured commitments such as Impact Benefit Agreements (IBAs) or Production Sharing Contracts (PSC), there is still tension between the national level and the local level:

“Kenya’s standard PSC reveals that the Company is under an obligation to ‘employ Kenya citizens in the petroleum operations, and until expiry or termination of [the] contract, train those citizens…' The clause is non-specific on proportions and is grossly generic in speaking of Kenyan citizens and not necessarily local communities; probably for a good cause. It follows therefore that even though Tullow has now come out and declared that in fact 57 per cent of her employees are from Turkana, there is strictly speaking no legal obligation on the company to source any given proportion of its work force from the local community.”

CSR21 urges you to read the entire article for great insight into the realities of mining operations in populated areas. Indeed, the writer ominously states, “The stand-off between Tullow Oil Plc and the Turkana community in Northern Kenya is not just a shame; it is also a bad sign, a very bad tell-tale sign of things to come.”