Company Awarded UGX 181 Billion Over Ban on Sand Mining in Lwera

DMW Uganda Limited, a sand mining and fish farming company has been awarded 181 billion Shillings as compensation for its illegal ejection from Lwera wetland, a catchment area along the Kampala-Masaka Highway.

The company, owned by Pastor Daniel Walugembe, petitioned the High Court Civil Division last year, challenging a directive by Parliament to ban their sand mining activities. The ban was effected after Parliament’s Natural Resources Committee received complaints that several companies were engaged in illegal sand mining and export.

In the aftermath, the Committee directed the National Environmental Management Authority – NEMA to cancel licenses of the companies within three weeks. The directive affected companies that did not have the necessary approvals for sand mining and those without an environmental impact assessment.

As a result, DMW also lost its sand mining and fish farming licenses for its activities in Kakwanzi Village, in Kalungu District.  The company told the court that they had lawfully obtained the licenses and contacted M/S Victoria construction Company to build access roads to the project sites from Kampala-Masaka Highway in line with the permits they acquired. 

They contend that they were shocked when Parliament directed NEMA to seal off the access to the Construction sites and confiscate some construction equipment and trucks within the area. They added that the project was frustrated and subjected to loss of income as a result of failure to have a lawful justification for the actions by NEMA, through parliament.

However, the government argued that Parliament never issued any directive banning sand mining and as such, the company was not entitled to the remedies they sought from the court.  Similarly, NEMA  which was also sued alongside the government confirmed that it had permitted the company to undertake sand mining activities but still had the right to withdraw or cancel permits due to non-compliance, substantial modification or undesirable effects of permitted activities.

In his Judgement, Justice Dr Andrew Bashaija, the head of the Civil Division of High Court acknowledged  that Parliament erroneously halted the mining activities as there is no valid justification whatsoever for their actions. 

Bashaija explained that since the company had obtained permits from NEMA, it had the legitimate expectation to earn from the sand mines adding that its licenses were halted unlawfully without any justification before the expiry of the respective terms of permits.

The Judge says  the evidence before him indicates that the company had entered into a contract with several other companies to supply the sand and as a result, it made losses worth billions of shillings.

Bashaija has accordingly awarded the company 178 billion for loss of business and earning and 3 billion Shillings as special damages. The monies will attract a 10 per cent per annum until payment is done in full.