June 29, 2022

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DMW Uganda awarded Ugx 181 billion over ban on sand mining

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A company dealing in sand mining and fish farming has today been awarded 181 billion shillings after court found that government had illegally halted its mining activities. 

DMW Uganda Limited which is owned by Pastor Daniel Walugembe in 2019 petitioned the High Court Civil Division challenging the directive by Parliament in October 2016 to ban their activities of sand mining in Lwera wetland.

The Parliament’s Committee on Natural Resources had issued the ban following complaints by legislators that several companies were engaged in illegal sand mining and export especially by the foreign companies. 

In the after math, the Committee directed National Environmental Management Authority – NEMA to also cancel licenses of the companies within three weeks for those who didn’t have the approval on environmental impact assessment reports among others.

As a result, DMW also lost its licenses for sand mining and fish farming on 69 and 50 hectares of land respectively for its activities in Kakwanzi Village, Kitti Parish, Bukamba Sub-county in Kalungu District. 

The company told court that they had lawfully obtained the licenses and had since contacted M/S Victoria construction Company to build access roads to the project sites from Kampala-Masaka High way in line with the permits they acquired.

They content 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.

DMW through their lawyers argued further that their project had been frustrated and subjected to loss of income as a result of failure to have a lawful justification for the actions done by NEMA  through parliament. 

However, during the hearing, 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 court. 

But NEMA  which was also sued alongside government confirmed that it had permitted the company to do the activities it was doing. NEMA added that it (NEMA) had the right to withdraw or cancel permits due to non compliance, substantial modification or undesirable effects of permitted activities. 

However, in his Judgement, Justice Dr Andrew Bashaija, the head of the Civil Division of High Court agreed with the company citing that indeed 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 it’s licenses were halted unlawfully without any justification before the expiry of the respective terms of permits.

In his view, this occasioned financial loss of business expectation which was the legitimate expectation of the company. 

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

To support his decision, 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 percent per annum until payment is done in full.

URN

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