CSR Uganda Country Note

CSR definition

For the purposes of the Uganda Note, CSR is defined using the understanding given in Report No.10 to the Storting entitled corporate social responsibility in the Global Economy. Therein the following areas are central to the concept of corporate social responsibility in international operations: respecting human rights; upholding core labour standards and ensuring decent working conciliations; taking environmental concerns into account; combating corruption; and maximising transparency. All companies operating abroad are expected to comply with the host country’s laws and regulations, as well as with Norwegian Legislation insofar as it applies to activities or operations carried out abroad. CSR extends beyond a company’s statutory obligation to comply with national legislation.

Uganda context

Uganda’s economy has recorded an average growth rate of well over 5% annually for the past 10 years. The same period has also been marked by relative political calm and macroeconomic stability which have permitted progress on key development goals. This rapid economic growth has seen the percentage of population living in poverty fall from one half in the 1990’s to one third to date. Primary and Secondary enrolment has also increase in 90%. Foreign Direct Investment to Uganda has increased steadily in the past 10 years and in 2008 it reached 787million USD. However Uganda ranks 157 out of 177 countries in the UN’s Human Development Index. Thus many development challenges still exit. Key of which include, rapid population growth, poor basic infrastructure in roads, utilities, housing and health.

Corruption still remains a pressing concern with Uganda ranked by Transparency International, at 126 in the world on the Corruption perception index 2008, along with Indonesia, Mozambique, Honduras and Libya. The conclusion of the African Peer Review Mechanism (APRM) on the reach of corruption in Uganda is that “all informants including political leaders and appointed officials agreed that corruption is now institutionalised.” This view is supported by a wide range of inquiries, investigations, assessments and reports, both national and international. It is also supported by public opinion that consistently perceives high levels of corruption in political and public service institutions and believes that corruption impacts on every aspect of life in Uganda.

Key relevant Ugandan legislation relevant to CSR: It should be noted that the Government of Uganda does not actively promote CSR although there are a number of laws and institutions in place which indirectly concern CSR. These laws will be the main guidelines for the enterprise intending to set up business in Uganda, as they lay out the legal requirements. These include among other: Employment Act 2006, Occupational Health and Safety Act 2006, Labour disputes(Arbitration and settlement) Act 2006 and the Labour Union Act 2006, National Social Security Act, Mining Act, National Forestry and Tree Planting Act , Water Act, National Environment Act and Noise Standards Control Regulations.

Working life: Many of the above laws have been passed recently and are therefore a great improvement on the laws that existed before. All are based on international best practice adapted to fit the prevailing local situations. Laws have been adopted to reflect the international conventions and protocols that Uganda has been signatory to. The Employment Act, 2006 outlines General principles such as forced labour, discrimination in employment and sexual harassment in employment. It covers general Administration and Jurisdiction, employment relationships, wages and related notices, rights and duties of employment, discipline and termination etc. The Occupational Safety and Health Act, 2006 covers Administration and Enforcement such as the appointment of inspectors, General duties and obligations and responsibilities of employers, The self employed, duties of Manufactures, suppliers and transporters, duties , rights and responsibilities of workers, Health and welfare, machinery plant and equipment, Fire preparedness etc.

The right to Union is covered by the Labour Union Act 2002; Workers have a freedom of association and are free to join labour unions of choice.

Child Work/ Child Labour: In Uganda, a distinction is made between child labour and child work. Children who are below 14year of age are not supposed to be employed and this is considered as child labour. However, between 14 and 18 year, children who work under supervision i.e. in vocational training institutes or under apprenticeship, if it is not detrimental to the health and does not interfere with education, this is considered as child work.

Environment: The National Environment Act which set up the National Environmental Management Authority clearly states the requirement of companies intending to set up operations in Uganda. Key of which is the Environmental Impact Assessment study.

Corruption: Governement of Uganda has stated policy of Zero Tolerance to Corruption. A directorate of Ethics and Integrity was established in 1998 under the Office of the President of Uganda and is mandated to coordinate all Government and non-government actors' efforts to fight corruption and rebuild ethics and integrity in society. To fulfill this mandate, the Directorate has spearheaded the development of the periodic National Anti Corruption Strategy (NACS) to fight corruption and rebuld ethics and integrity in society. ( a 2008-2013 strategy is still in draft form) The primary anti-corruption agency is the Inspectorate of Government (IG) which is constitutionally independent and carries a wide mandate in the fight against corruption as well as the Ombudsman function. A number of other bodies have functions closely related to anticorruption action but hold mandates where corruption is but one element. These include the Directorate of Public Prosecution (DPP), Criminal Investigation Directorate (CID) and the Public Procurement and Disposal of Public Assets Authority (PPDA). The Directorate of Ethics and Integrity (DEI) coordinates anti-corruption policy and provides political leadership.

Uganda has subscribed to a number of international treaties and regional organisations whose operation has direct relevance for the manner in which accountability issues are addressed:

• United Nations Convention against Transnational Organised Crime 2000 (The Palermo Convention);
• United Nations Convention on the suppression of the financing of terrorism (1999);
• United Nations Convention (the Vienna Convention) against illicit traffic in narcotic drugs and psychotropic substances (1998);
• United Nations Security Council Resolution 1373;
• United Nations Convention against Corruption. United Nations 2003;
• African Union Convention on Preventing and Combating Corruption. The African Union July 2003;
• East African Community and East African Customs Union;
• New Partnership for African Development (NEPAD);
• East and Southern African Anti-Money Laundering Group (ESAAMLG)

ILO’s core conventions. Uganda has ratified 30 ILO conventions

Relevant CSR issues: Companies planning to set up in Uganda should first of all register with the Uganda Investment Authority which is a one stop centre for handling prospective investor inquires and needs. Companies need to adhere with the required laws and regulations as stated in the Employment Act 2006. The Occupational Health and Safety Act 2006, the Labour Union Act. The company is required by law to register with the National Social Security fund and to ensure compliance. Prior to starting a business venture, companies need to undertake an Environmental Impact Assessment and have the National Environmental Management Authority consent to it.

Companies should note that the Tax Code in Uganda does not allow corporations to deduct expenditure on philanthropy or other development work from their overall tax payments. (This quite understandable in the Uganda context in which the country is still grappling with extensive development challenges and is therefore focusing on increasing the tax base for revenue collection)

The following Institutions and organisations such as the Institute of Corporate Governance Uganda, the National Environmental Management Authority, Directorate of Ethics and Integrity, Federation of Uganda Employers and the Uganda Manufacturers Association have an important role to play and can be useful resource points for an intending investor.

Contact information for relevant networks, organisation and advisors.

An overview of activities, organized by the Embassy, relevant to CSR:

• NHO and FUE collaboration has supported the FUE’s development of a CSR tool kit that is available to member companies of FUE.
• Embassy support to the UNIDO-UIP -Uganda Cleaner Production Centre.
• Embassy support to the Justice Law and order sector Embassy support to the Financial Management programme
• Embassy support to the Office of the Auditor Generals office Embassy support to the Deepening Democracy Program
• Embassy support to the Strengthen of the Management of the oil and Gas sector in Uganda

Royal Norwegian Embassy Kampala, Uganda. Tel. +256 (0)41 711 2000 website: www.norway.no or www.norway.go.ug