PS1: Social and Environmental Assessment and Management Systems
An Environmental Impact Assessment (EIA) is required by law for every new sub-station as well as for substantial refurbishments of existing sub-stations and development of new distribution lines. EIAs must be approved by the National Environmental Management Agency (NEMA) before development can begin, via the issuance of a certificate. Umeme uses a NEMA-approved independent environmental consultancy for all its EIA work. Typical issues include containment of oils via appropriately sized bund walls and sumps to prevent surface and groundwater contamination, and the installation of fire barriers between transformers. Environmental audits are commissioned when sub-stations are being refurbished, in order to deal with historical issues such as oil contamination. NEMA issues a compliance agreement once audits are submitted, together with a work plan outlining action items.
Umeme has an Environmental Safety and Governance (ESG) Committee at corporate level. ESG issues are managed by a corporate Safety and Systems Manager. The Projects Department has a dedicated Safety Officer, who also co-ordinates the necessary EIA studies. Umeme is currently in the later stages of achieving ISO 9001 (Quality Management) and expects to receive certification in Q2 2009. The company has decided that the procedure development process currently being undertaken for ISO 9001 will incorporate the identification and implementation of safe systems of work and the control of environmental impacts. A number of key Occupational Health & Safety procedures have been compiled and incorporated into this system. Subject to successful ISO 9001 certification it is planned for Umeme to achieve ISO 14001 (Environmental Management System) by the end of 2011 and OHSAS 18001 (Health and safety) by the end of 2013. Training has been more focused on health and safety aspects than environmental aspects to date, due to the inherent risks in the power distribution sector. ESG sensitization now forms part of employee induction programs and more detailed training is gradually being rolled out to managers, senior staff and those undertaking high risk activities. This year (2009) will see an increased focus on environmental issues such as pollution control and proper disposal of various waste streams.
Internal ESG audits are conducted by the ESG team. These cover issues relating to buildings, environment, welfare, personnel protective equipment, public safety, internal communication & training, documentation & reports, fire, supervising & monitoring, appointments, plant and equipment and isolation procedures. Regular external audits are conducted by NEMA during the course of sub-station and new distribution line installation. Environmental mitigation measures defined in approved EIAs are supervised by the independent EIA consultants during construction. ESG issues are reported at Board level and will in future be reported to IFC via an Annual Environmental & Social Monitoring Report (AMR).
PS2: Labor and Working Conditions
Labour law in Uganda changed significantly in 2006 with the enactment of a series of labour laws which introduced significant changes to national labour jurisprudence. These included the Employment Act, the Labour Unions Act, the Labour Disputes (Arbitration and Settlement) Act and the Occupational Safety and Health Act of 2006, all of which variously altered the contractual standing of employers with their employees. Statutory working hours were reduced, annual leave and sick pay guaranteed and the scope of the regulated workplace extended. Umeme, which currently has approximately 1300 employees of which 1200 are permanent staff, followed international good practices at its inception in 2005, resulting in minimal disruption following the statutory changes. Notwithstanding this process, Umeme has had to make substantial changes to its human resource contractual framework to be more responsive to statutory changes, as part of the migration from the old Employment Regulations (2005) to an updated edition currently pending approval.
Umeme`s workforce is male-dominated, a reality occasioned by the inherent requirements of its technical activities for which the female gender was hitherto considered unsuited. Umeme has nontheless worked to reverse this imbalance by embracing a non-discriminatory policy as an equal opportunity employer and aims to increase female employees over time. The company does not discriminate on the basis of HIV-AIDS status, colour tribe, sex, disability, religion or political opinion. The company has a collective bargaining arrangement with the Uganda Electricity & Allied Workers Union, in accordance with the Labour Unions Act of 2006. Approximately a quarter of Umeme employees are union members. Umeme has a comprehensive Human Resources Manual which is provided to all employees upon joining. Key elements are highlighted in the appointment letter, for example position, remuneration, working hours, overtime rates, sick pay and termination notices. These are further explained during induction training. This manual contains conditions of service including the disciplinary code and severance pay arrangements in the event that retrenchment is necessary. Over 100 staff separated services with Umeme in 2008, of whom approximately two thirds were dismissed mainly on grounds of fraud and theft-related reasons.
The manual also contains a clearly defined employee grievance and complaint procedure. Over and above this procedure, a more comprehensive Globaleq manual is in place and the same provides for a procedure whereby any employee can e-mail the directors to make their complaints known, after failing to get redress from within the company systems and procedures. All employees must be at least 18 years of age to quality for a job with Umeme. There have been two major retrenchments involving around 330 persons in March 2005 when Umeme took over the distribution network, and about 150 persons in July 2006. In each case, discussions were held with the Union and other stakeholders well ahead of time and in the result there were no significant issues reported. To guarantee independence and transparency, external firms were used to carry out competence assessments to determine which posts/people should be made redundant, Umeme has recently undertaken a major exercise to evaluate all jobs, write job descriptions and structure associated remuneration packages in an attempt to ensure fair and transparent treatment of all employees.
Staff members undergo pre-employment medical examinations, in which confidential HIV-AIDS testing is optional. There is special provision made in the employee medical scheme to cover the HIV related treatment such as anti-retroviral drugs (ARVs) and other choronic & pre-existing conditions normally not covered under medical insurance schemes. There is an additional, in-house scheme available to staff particularly those who make it known that they are HIV-positive. This is an attempt to look after these staff and to make it known to all that HIV-status will not lead to discrimination in the Umeme workplace. Umeme has an in-house HIV-AIDS counselor, a workplace program with peer educators and has undertaken widespread training and publicization of the issue both internally and externally, in partnership with organizations such as Business PART, a USAID funded project.
Umeme uses a safety and health compliance system for its contractors and major suppliers, which provides an ongoing assessment of their occupational health and safety readiness and performance. This has also been built into the procurement process, as a pre-qualification criterion. At the strategic level HS (G) 65 (Successful Health and Safety Management – compiled by the UK Health and Safety Executive) is being used to identify and monitor key safety activities. In June 2008 a systematic audit was carried out on Umeme using HS (G) 65. Progress on activities identified from this audit (Policy & Manual Approval, SHE bulletins, Top Event Accident Analysis, Development of safety training materials, the Network audit, Schools talks and management system implementation) is reported to the Umeme ESG Board subcommittee.
Personal Protective Equipment (PPE) is provided to all employees, free of charge and replaced when damaged or has deteriorated through use or age. Standard specification for all PPE types is established by the health & safety department in consultation with the users. The company has recently been approved to run internally the IOSH Managing Safely course which is internationally recognized and accredited by the Institution of Occupational Safety & health in the UK. The company Safety & Systems manager is the approved provider of this course. Electrical competence is the cornerstone of Umeme’s safety program, but the company also organizes driver training, safety briefings and tool box talks on a wide range of subjects. A comprehensive database is maintained by the health & safety department which allows analysis to be undertaken each month to monitor trends and performance. This information forms part of monthly reports covering all aspects of the organization’s safety management system. Umeme uses Occupational Safety & Health Agency (OSHA) statistics which link to the International Labour Organisation as a minimum benchmark, with annual Key Performance Indicators (KPIs) established for internal and external accidents above this minimum standard. Recordable incidents include fatalities, lost time incidents, restricted work incidents and medical treatment incidents. The OSHA standard for recordable incidents is 2.30, whilst Umeme’s current KPI is 1.5 and the current Umeme recordable incident rate is 0.34. The last workplace fatality occurred in December 2007.
Umeme prioritizes safety-related training including defensive driving for drivers and First Aid. For the former (defensive driving), the training program is split into three categories (trucks, specialist vehicles and commercial vehicles). The training program is managed by the Umeme HR department with training provided by the Ugandan Transport Police. The training program covers both theory and practical instruction and testing and also includes medicals. There are currently 100 employees participating from the engineering division and this will continue in 2009. Discussions have been held with the Transport Police for permission to install flashing beacons on all Umeme commercial vehicles for safety purposes, though final approval has not yet been granted. A fleet management system involving tracking devices is being established currently. These devices allow speed, location, fuel consumption and stop/start times to be recorded and assessed.
PS3: Pollution Prevention and Abatement
Oil spillage, waste handling and materials storage have been identified as key environmental aspects for Umeme to manage from a pollution control standpoint. Focal areas include Umeme’s 33 kV/11kV substations and main operations depots. Substations vary considerably in age and state of rehabilitation, ranging from brand new to decades old, and from original condition to rehabilitated. A number of substations have been refurbished since the 1990s using German, Japanese and Swiss bilateral funding and World Bank multilateral funding. Substations typically comprise of a fenced in area, manned by a security guard housing a small on-site building (plant house) and one or two power transformers. Japanese-funded substations feature weatherproof units which can be accessed directly from the exterior, instead of plant houses.
Transformer oil spillage from transformers appears to be a common feature at substations, although volumes vary. A previous EIA for the rehabilitation of UEDCL components conducted in 2004 observed that most leaks were relatively minor in nature, though a handful were regarded to be sufficiently serious to endanger ground and surface water quality in the vicinity. Tranformer oil, or insulating oil, consists of a highly refined mineral oil which is stable at high temperatures and has dielectric (electrical insulating) properties. It is used primarily as a coolant. The company currently has more than 60 large power transformers, each containing significant volumes of transformer oil (averaging 4 tons), as well as more than 5000 smaller distribution transformers containing roughly 300 litres of transformer oil each. Umeme has a basic transformer oil treatment re-generation unit which allows for periodic heat treatment of this oil to remove impurities. Eskom, the South African power utility, has a more comprehensive transformer oil regeneration plant at the Owen Falls hydro-electric station, which could potentially be used in future.
There are two main issues associated with oil spillage, namely contamination of soils, groundwater and surface water and PCB contamination. Oil spillages: All new and refurbished sub-stations are fitted with bunded oil sumps located below the transformers which can handle a minimum of 110 % of the total oil capacity of the transformers. Additionally, plugs on distribution transformers have been welded shut to avoid oil theft and a progressive program of fencing all transformers country-wide is being implemented to prevent loss of oil due to theft and vandalism. Attention is also being paid to ensure that refilling and maintenance procedures are robust and do not give rise to spillages.
PCB contamination: Although all power transformers and a sample of distribution transformers were tested for Polychlorinated Biphenyl (PCB) content by the Government chemist in 2005 and found to be substantially free of such substances, this finding is questionable given the presence of a relatively significant number of pre-1985 era transformers in service and the lack of suitable analytical capacity in Uganda. A recent study entitled National Implementation Plan of the Stockholm Convention on Persistent Organic Pollutants for Uganda (UNEP and partners, 2008) found that 12 % of a sample of 159 transformers country-wide had PCB levels exceeding recommended levels. Likely sources of contamination were listed as: cross contamination with PCB contaminated oil during service and repair of transformers and presence of pre-1985 transformers still in use. The relevance of PCB contamination is that the transformer oil is considered hazardous and unsafe to handle and dispose of without special decontamination precautions. For employees, this means being trained in PCB handling and provided with adequate Personal Protective Equipment (PPE). The Ugandan context is one in which accidental spills and leaks are common (as described above) and also where theft of transformer oil is widespread across the distribution network. Stolen or recycled oil is reportedly used for welding, hair products, wound treatment, lubrication and as a skin lotion. Some of these activities could be very hazardous if the oils contain PCBs. Likewise, significant leakage of such oil could cause contamination of water systems and enter the food chain (although the likelihood of this occurring is regarded to be low). Clearly, if PCBs are present in some Umeme transformers, the possibility of cross-contamination due to recycling of oil also exists. As a result, Umeme has agreed to take further actions to quantify this potential problem and to institute the appropriate mitigation measures as required (refer to the attached Action Plan).
Aside from transformer oil, Umeme uses few hazardous materials. Small quantities of paint and thinners are kept in the Stores area, in a ventilated, locked area. No fuel is stored by Umeme; re-fuelling and maintenance of the fleet of 300 Umeme trucks and 200 Umeme motorcycles is outsourced to third party providers such as Shell and Total. No pesticides are used in way-leaves and no burning of vegetation in these way-leaves is undertaken.
Umeme generates two dominant waste streams, namely old transformers and treated utility poles. As alluded to above, waste transformer oil tends to be either recycled or finds its way via informal channels into third party uses. The storage and disposal of old transformers has been identified as an area requiring further attention. Typically, the transformers are stored at Umeme’s main depot before being sold to registered scrap metal dealers; however, removal of transformer oil and associated leakage require further attention, as reflected in the Action Plan. Treated wood utility poles are currently sourced from South Africa, Uganda and Brazil. These poles have been pressure treated with one of two sorts of heavy duty wood preservatives, which protect the wood from decay fungi and wood attacking insects such as termites and borers, as well as improving weather resistance. Chromated Copper Arsenate (CCA, also referred to by its main global trade name ‘Tanalith’) is a water-based compound with a greenish tint comprised of a mixture of copper, chromium and arsenic salts. Creosote is a black oily substance distilled from coal tar, comprised mainly of polycyclic aromatic hydrocarbons (PAHs) but also containing phenols and cresols. Although Umeme does not have its own wood treatment plants, the disposal of treated poles poses certain challenges.
There are tens of thousands of treated poles which are rotten and which need to be replaced. Although replacement is a normal process in any distribution network, Umeme faces particular volume challenges due to factors such as the dilapidated state of the distribution network, Uganda’s hot, wet climate and historic procurement of poorer quality (inadequately treated) poles. There is currently no coherent strategy for the safe disposal of these old poles. Good industry practice involves one of three main options, namely a) landfilling in a sealed site; b) high temperature incineration or c) controlled recycling for uses which exclude burning on open fires and close skin contact. It is unlikely that either of the first two options are currently feasible in Uganda. Umeme has previously made efforts to collect the poles and sell them to businesses; contractors were required to cut the poles into 2 m sections to preclude re-use in the network, and to return the sections to Umeme. In practice, the company does not currently possess sufficient storage space to collect the poles and as a result they have been allowed to be collected and/or sold by contractors and the general public. This may pose health risks, as described below under PS 4: Community Health, Safety and Security. A concerted effort is required to investigate and regularize treated pole disposal, in consultation with pole suppliers, fencing/building contractors, other potential off-takers, and NEMA (as reflected in the Action Plan) It should be noted that this particular challenge is faced throughout the region and also in developed country markets where it has been managed in different ways by different agencies.
Umeme’s greenhouse gas emissions are relatively insignificant, and associated almost entirely with fuel consumption by the company’s fleet of motor vehicles. Total annual consumption for this fleet in 2008 was approximately 966 000 L of diesel and 222 000 L of fuel. This translates to emissions of ± 3200 tons CO2 equivalent per annum.
PS4: Community Health, Safety and Security
There were 15 public fatalities associated with Umeme’s network in 2008, almost all in low voltage (mostly residential) parts of the network. Comparative public fatality figures for previous years since Umeme began operations in March 2005 are as follows: 15 (2005), 16 (2006) and 10 (2007). These arise due to dilapidated network elements inherited from the previous operator i.e. rotten poles, poor or incorrect conductor joints and historical joining of different size conductors. Although regarded as a significant problem area by Umeme, benchmarking in East Africa has shown that Umeme’s public fatality frequency rate in relation to the size of its network is the lowest in the region. Although there are pockets of high-risk network, which Umeme targets for rehabilitation purposes, network dilapidation problems are both common and geographically dispersed, meaning that network-related risks to the community are not amenable to immediate trouble-shooting efforts and are likely to persist for several years until the bulk of the network has been overhauled. Current plans are that, by 2013, three quarters of the dilapidated network infrastructure that Umeme inherited will have been repaired or replaced.
Way-leaves for power distribution in Uganda do not belong to the utility company or state, as is the case in many other countries, although unimpeded access to these wayleaves may be sought for maintenance purposes. As a result, there is widespread encroachment of houses and businesses into these way-leaves, much of which cannot easily be successfully challenged in court. This raises the risk level associated with line breakage and can lead to electrocution if people are not careful in what they are doing below the power lines. Theft is also a risk for Umeme, involving everything from transformers to conductors (power lines), transformer oil, power – via illegal connections – and other saleable items. This has historically been a problem involving both external and internal stakeholders, and as a result Umeme is tackling the problem via a variety of avenues. One of the more significant concerns relating to theft of transformer oil is that it may well be contaminated with PCBs (as discussed under PS 3, above). The oil is reportedly used for a variety of end-uses, one of which involves rubbing on the skin as a form of skin care. High oil prices have exacerbated the problem recently. Clearly, if the oil has significant PCB levels, this practice is dangerous. As mentioned above, Umeme has begun to weld the sump plugs on its distribution transformers and fence its ground mounted transformers, in order to try to stop this practice.
Umeme has a multi-pronged approach to dealing with public fatalities associated with the use and abuse of its network infrastructure. A major public sensitization program highlighting health and safety risks has been undertaken via press articles, radio talk shows, trade shows and the use of industrial theatre. This includes a substantial school-based safety program which has involved visits to more than two thousand schools to date, including all of those which are served by the power distribution network administered by Umeme.
Umeme currently utilizes three private security providers. At up-country locations, a total of 139 Saracen Security guards work day and night shifts at Umeme offices and infrastructure sites. In Kampala, this work is undertaken by 119 guards employed by Ultimate Security. Finally, Umeme’s senior staff residences are guarded by 11 guards from Security Group. Following advice from the Uganda Police Force, guards are armed at residences and at locations where cash is handled. To date, there have been no armed robberies or incidents involving the use of guns by these guards. All guards have radios. The security companies are subjected to a degree of screening by the Uganda Police Force. The main security issue for Umeme is theft of equipment, disposables and power. Cable and power line theft was controlled for a time through the banning of scrap metal dealing in Uganda; however, this activity has now been unbanned and copper theft has increased significantly in the first quarter of 2009, notwithstanding the replacement of copper conductors (powerlines) with lower value aluminum conductors. In situations where illegal connections are being dismantled or power cut off after illegal use, the Uganda Police Force may be asked to accompany Umeme employees to ensure their safety and security.
PS5: Land Acquisition and Involuntary Resettlement
There is no physical displacement (i.e. involuntary resettlement) associated with this project. Umeme acquires land for two purposes, according to the processes outlined below.
In the case of new sub-stations, land is purchased on a willing buyer/willing seller basis at 100 % of the market price. The process of acquisition is as follows: a) Identification of the area where a substation is to be constructed; b) Identification of the land around this area that is available (on sale); c) Identification of the landowner(s) and verification of Certificates of Title in the Land Registry; d) Valuation of the Land by private valuers and negotiation with the landowner; e) signing of a purchase agreement and transfer of title deed once Umeme and the Landowner(s) agree on a purchase price and f) payment of the landowner(s) and transfer of ownership to Umeme via the land registry. In the case of new power line installation, Umeme pays compensation for ‘way-leaves’ i.e. the right to use another person’s land for construction purposes. The company pays compensation for the crops that are destroyed during construction plus a certain percentage of the market price of the land as a disturbance allowance. This is a legal requirement in Uganda, i.e. that in addition to the assessed compensation, a disturbance allowance is paid as compensation for an ‘involuntary sale’. The disturbance allowance is 30% of the assessed amount if the land is to be used within 6 months of notifying the landowner and 15% otherwise. The process of acquisition of way-leaves is as follows: a) Survey of the proposed power line route; b) Identification of the landowners along the proposed power line route; c) Notification of the landowners of the plan to construct a power line through their land; d) Seeking of landowners’ consent for the construction of a power line through their land; e) Assessment of compensation; f) Signing of way-leave agreements and g) payment of compensation by Umeme.
Land acquisition is generally an uncomplicated process, although there are occasional complaints or disputes over compensation amounts which are dealt with via a dispute resolution process. If these isolated cases can’t be dealt with via the valuers or through discussions between landowners and Umeme, aggrieved parties may take the matter to the courts. The above arrangements are in keeping with IFC’s requirements related to land acquisition.
