On 27 April 2020, the Parliament of Uganda unanimously passed the National Climate Change Bill, 2020 (Bill). The Bill now awaits presidential assent to become law. Below we examine what this law may mean for private entities doing business in Uganda.
Purpose of the Bill
The purpose of the Bill is to give force of law to the United Nations Framework Convention on Climate Change (UNFCCC), the Kyoto Protocol to the United Nations Framework Convention on Climate Change (Kyoto Protocol) and the Paris Agreement, 2015 to which Uganda is a signatory.
Definition of climate change
The Bill defines climate change as a change of climate which is attributed directly or indirectly to human activity that alters the composition of the global atmosphere and which is, in addition to natural climate variability, observed over comparable time periods.
Who is to be affected?
It has been found that only 100 companies around the world are responsible for about 71% of industrial emissions that cause global warming. It therefore comes as no surprise that the scope of the Bill ranges from Government and its agencies to private entities and even individuals.
Institutional and legal framework
The Bill provides for:
- the Framework Strategy on climate change to guide Government in planning and budgeting for, and financing and monitoring of, climate change programs and activities;
- the National Climate Change Action Plan; and
- the strengthening of the Department of Climate Change in the Ministry of Water and Environment bestowing on the Department the responsibility of ensuring that Uganda meets her obligations under the UNFCC, Kyoto Protocol and the Paris Agreement.
Duties of individuals and private entities
Clause 22 of the Bill provides that the Minister in charge of climate change matters, through regulations, may impose obligations relating to climate change, on individuals and private entities, for which individuals or private entities will be required to prepare a mitigation and adaptation plan.
In other jurisdictions, such obligations have included: contributing towards a climate change fund, adopting green technology, and reducing financing towards dirty energy and the like. In December 2017, the World Bank announced that, with the exception of the poorest countries in the world, it would stop funding upstream oil and gas projects after 2019. We have also started to see activists in Uganda and around the world protest financing towards Uganda’s nascent oil and gas industry. More of this is expected in the years to come, especially with the passing of this Bill.
It would be prudent for financial institutions, large and small corporates alike to evaluate their activities and policies and take on a proactive approach to reducing climate change such as including genuine anti-climate change initiatives into their policies and activities. Some traditional oil and gas companies around the world have already began such efforts and rebranded themselves to reflect a transition to cleaner, smarter, more efficient and more accessible energy options.
Litigation on climate change
Clause 25 of the Bill provides that a person may apply to the High Court for relief against the Government, an individual or private entity whose action or omission threatens or is likely to threaten efforts towards adaptation to, or mitigation of, climate change.
The Clause goes on to provide that in addition to any other orders the Court may deem appropriate, the Court may also order: the prevention, halting or discontinuance of any act or omission; compensation to a person who has suffered loss and/ or compel a government entity to take measures to reverse an act or perform an act that was omitted.
The Clause extends the right to bring such legal action to even those who have not necessarily suffered personal injury.
There is already some precedence for it in other jurisdictions. Recently, a leading international energy group was held to be legally liable for contributing to climate change by a Dutch Court. The company was ordered to cut its Carbon dioxide emissions by 45% by 2030. The company was also found responsible for its customers emissions. This landmark case, brought by seven environmental groups and 17000 Dutch citizens, was the first of its kind but we doubt will be the last. It serves as a window into the environment corporate entities will soon have to operate in.
This Clause 25 by far poses the biggest risk of the Bill to entities operating in Uganda. It has the potential to open the floodgate of litigation upon corporate entities and all the attendant costs that come with it. Financial institutions, manufacturers, energy companies, transporters and other corporate entities may need to seriously examine their policies and activities and bring them in line with the climate change legislation.
Read the original publication at Bowmans.