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January 16, 2017

Answers to A-Studio’s claims about Green Resources’s activities in Uganda

On 16 January the Finnish Broadcasting Company (YLE) published an online report about community relations in Kachung, Uganda, where Green Resources has a forest plantation. The same subject was discussed in a programme broadcast by YLE’s A-studio.

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Green Resources works closely with inhabitants of the area. For example, the company has built several water points in local villages.

On 16 January the Finnish Broadcasting Company (YLE) published an online report about community relations in Kachung, Uganda, where Green Resources has a forest plantation. The same subject was discussed in a programme broadcast by YLE’s A-studio.

Unfortunately, the story contained several factual errors that need to be corrected. Here are the main ones.

Contrary to claims made in the story, homes have not been destroyed. According to Finnfund’s information, there were no inhabited houses or dwellings in the area. Outside investigators have come to the same conclusion.

No complaints have been received from inhabitants about the use of chemicals in Kachung and any possible side effects. In principal, the chemicals used by Green Resources are in widespread use elsewhere, including Finland.

The Swedish Energy Agency has corrected erroneous claims about Kachung on many occasions and provided information about the situation on its webpages.

Contrary to claims made in the story, most of the land used by Green Resources for forest plantations is leased from local communities. This is the case in Tanzania and Mozambique. In Uganda, however, the forest reserve is nationally owned so the leasing agreement has been made with the state. This is explained on our website.

Land ownership is defined in the Ugandan constitution (article 237), which states that ownership and protection of forest reserves, national parks, rivers and lakes is a state duty.

Contrary to the story, cattle have not been prevented from passing through the forest at any time of the year. The right to take cattle to drink in the marsh area is widely used, especially during the dry season.

What the report fails to mention is that Green Resources has actively tried to persuade officials to give the local communities a special permit to graze their cattle in the forest. Ugandan law forbids grazing and farming in the area and, so far, officials have not granted an exemption.

For Green Resources it is a difficult situation. The company does not own the plantation area at Kachung. The land is nationally owned forest reserve, managed by forest authorities. This is a typical situation in Uganda. Green Resources has merely leased the land for 50 years. It understands the importance of cattle grazing to local people but cannot act in defiance of its leasing agreement.

Green Resources has worked hard to resolve these problems, and to our knowledge, the situation seems to be improving. The company works closely with local communities and has put a lot effort into improving their welfare and cooperation. For example, it annually donates 10 percent of all seedlings to local communities, and provides training in farming and in making modern fuel-efficient stoves.

The company is also a major employer. It currently employs nearly 400 people in the area. These jobs give training and provide income from sources other than traditional farming. Green Resources also implements project important to local communities; it has built water points and wells and a children ward for villages, and provided HIV and AIDS education and testing.

Project aims to benefit local people

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Finnfund’s Environmental and Social Advisor last met with local communities in Kachung in autumn 2016. The next study by an outside investigator begins in January 2017.

An important aim of the project has been to create benefits for local inhabitants, as well as to mitigate climate change and curb deforestation, which is constantly accelerating in Uganda, too. This is why Finnfund has invested in the project. Along with other development finance institutions, it has been financing Green Resources since 2012.

Together with other financiers, Finnfund has closely monitored the situation in Kachung and relations with local inhabitants. Finnfund’s Environmental and Social Advisor last visited Kachung in autumn and met with local communities. Villagers said that most of the land disputes were no longer pressing problems and that relations with the company had improved. They thought that they had benefitted from the company and hoped that it will continue in operation.

They felt the greatest benefits were jobs and development projects, such as village wells and water points, the children ward and roads. The fact that the company gives away 10 percent of its seedlings annually was also welcomed. They especially appreciated the new road that crosses the forested area, which they had jointly planned with the company and which they use to take their cattle to the watering place. It is especially important during the dry season.

It remains true that some people in local communities feel that they have lost farming and grazing opportunities and are demanding compensation from the government.

The worsening problem of Ugandan deforestation – sustainable roundwood is needed

Responsible forest plantation is playing a key role in controlling climate change. Forestry projects also curb deforestation in an area where most natural forests are disappearing or have already gone.
In Uganda deforestation is accelerating. The United Nations FAO calculates that 40 percent of Ugandan forests disappeared in the decade between 2005 and 2015. The country has an increasing need for firewood and timber, because its population is growing and its middle class is expanding.

Finnfund takes a very serious attitude towards environmental and social responsibility in its investments

The assessment of environmental and social impacts is always made before an investment decision as part of the project preparation process. Assessment continues as the project proceeds and support in implementation is given where necessary.

In this project too, disbursement of loan installments is tied to implementation of environmental and social responsibility and development. This procedure is typical for development finance institutions, which seek to promote business development at the same time, and often the development of an entire business sector.

Finnfund’s mission is to promote development and often act as a lever for responsible business in areas of high risk, where commercial finance is not available. Getting companies involved in sustainable development and poverty reduction is essential if, for instance, the sustainable development objectives set by UN member countries in 2015 are to be met.

Finnfund operations are focused, to an increasing extent, on the poorest developing countries, where social structures and demands are in their infancy. Development finance institutions like Finnfund seek to support and promote responsible business that will produce development effects such as jobs and wellbeing. This is our goal in Kachung too.

Finnfund sent details of these and other errors, as well as background information and sources, to A-studio on 16 January. It asked the editorial office to check the facts and correct the errors.

Teddy Nyamaizi Nsamba, Environmental and Social Director of Green Resources tells about the company and cooperation with local communities. The interview was made in Kachung, Uganda, in September 2016.

Video: Sustainable forestry in Uganda: Meeting with Teddy Nyamaizi Nsamba from Green Resources

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