sharing in governance of extractive industries
Stakeholder Listening Exercise; February/ March 2017 Daniel Gilbert – Independent Mining & Metals Researcher
This article reports on the introduction of Trimble's Landfolio for Natural Resources (Landfolio) implementation in Malawi; the policy context for that product’s introduction; and stakeholder views therein.
In many cases, this software is referred to “FlexiCadastre”; in its introduction to Landfolio, Trimble makes the connection to the FlexiCadastre brand name by noting that “formerly known as FlexiCadastre, Landfolio software for natural resources facilitates all aspects of the application, evaluation, granting and compliance monitoring of mineral, surface and water rights, and their related legal agreements.”
The online Mining Cadastre Map portal implemented by Trimble is akin in scope and functionality of those it has previously rolled out for the Democratic Republic of the Congo, Kenya, Liberia, Namibia, Mozambique, Papua New Guinea, Rwanda, South Sudan, Tanzania, Uganda, and Zambia. One finding of the stakeholder engagement exercise below was that there was some confusion between these Mining Map Cadastres and Trimble’s eGovernment Mining Cadastre portals, the latter representing a further stage of augmentation, as has indeed been the case for three of the nations listed above, namely Kenya, Papua New Guinea and Tanzania; Malawi may chose to follow the example of these three nations further to the introduction of its online Mining Map Cadastre Map portal, just like they did. The differences between the two different types of portal are clearly shown on Trimble’s website.
The online Mining Cadastre Map portal is the public-facing side of the roll-out of Landfolio in Malawi. Supporting this is the development of a digital mineral rights management system, known as the Mineral Rights Management System (MRMS). This commenced, in August 2016, with the implementation of the prototype MRMS, with the final version due to be launched in March 2017, as reported in the December 2016 edition of Malawi's Mining and Trade Review.
Taken together, the technology will combine the backend mining cadastre system (the MRMS) for use by the Government of Malawi (GoM), developed to enhance the GoM’s effectiveness and efficiency in administering subsoil mineral rights in Malawi, and the online mapping portal that aims to greatly enhance the public’s experience of accessing subsoil mineral rights information in an appealing and user-friendly manner. Landfolio covers both of the above, and is designed to be greater than the sum of its parts.
To fund the introduction of Landfolio for Natural Resources, the GoM accessed funding (in the form of grants from the European Union and loans from the World Bank) under the Mining Governance and Growth Support Project (MGGDP). My work in producing this blog post was supported by Trimble.
I sought and received stakeholder views in early February 2017, including from the private sector, cooperatives, civil society, media, and the GoM. The overall level response rate was excellent, over 25% of all contacted individuals responded as compared to a more typical level response rate for such a listening exercise of <10%. I was struck both by the candid, articulate and well-informed nature of the response received. I would like to take this opportunity to thank everyone who took part.
The following responses were received by sector, giving an overall total of 12 respondents from 47 individuals emailed:
No one sector numerically dominates the responses, which were received from a broad range of individuals and organisations. The listing above is in the order in which the below article reports on the respective stakeholder group findings. Individuals who responded to this 2017 stakeholder listening exercise are indicated, when first referred to, in bold.
Context is important and the policy context of the introduction of in Malawi is that of a country seeking to greatly enhance the role of the mining sector within its economy. My research conducted in-country in 2014/15, Malawian Voices, Malawi’s Natural Resources, clearly indicated the broad support for mining sector development across civil society, the private sector and government (i.e. the three core stakeholder constituencies of the Extractive Industries Transparency Initiative that Malawi is signed up to as a Candidate Country), so long as that sector development was conducted responsibly and inclusively.
A second recurrent theme of this 2014/5 research was the need for Malawi to replace its Mines and Minerals Act of 1981, and widely seen as outdated. Formal enactment of the replacement Bill is repeatedly called for, for instance by Chiku Jere as recently as January 2017 in Malawi’s Mining and Trade Review (page 4):
"communities from mining areas last month had an opportunity to meet Members of Parliament at an interface dinner in Lilongwe and had one demanding but common voice to the legislators – 'Table and Pass the Mines and Minerals Bill and stop the suffering we are facing!'".
GoM official policy on Malawi’s mining sector, both the overarching policy document of 2013 and the artisanal and small-scale mining (draft) policy of the following year, both referred to below, seeks articulation in this new Bill, which has been the subject of in-country redrafting support from eminent professors from both the Colorado School of Mines (USA) and, before that, the University of Dundee (Scotland).
A year prior to my visiting Malawi to conduct this research, the then Minister of Mining, John Bande MP, stated, at the official launch of Malawi's Mines and Minerals Policy in 2013, that the GoM was targeting the minerals sector to contribute at least 20% of national GDP by 2016. This represented something of a change of emphasis for the then-GoM since the country’s National Export Strategy (NES, 2013 - 18) published in December 2012, prioritised three "export-oriented clusters for diversification" – none of which were mining, a sector that was slated simply for ongoing support (pp. 7-8).
Despite this new prioritisation of the mining sector, GDP contribution from that sector fell sharply between 2013 and 2014:, falling from 5.5% in 2013 to just 0.9% in 2014.
Unforeseen circumstances played a huge part in this: the Fukushima Daiichi disaster of 2011 led to a steep drop-off in the price of uranium oxide ("yellowcake") as Japan halted its nuclear power production and other countries, to varying degrees, moved away from nuclear - notably France and Germany; critically, Malawi’s mining sector relied overwhelmingly, in economic terms, on uranium mining – and on just one mine, Kayelekera, see below.
Landfolio’s Policy Significance
Respondents to this 2017 stakeholder listening exercise noted that Landfolio was a beneficial step in the investment promotion of Malawi’s mining sector as it offered the promise of better information and reduced transaction costs through greater efficiency; hence its policy significance was positive. This was seen as part of a package of enhancements benefiting the sector in Malawi, not least the completion (and eventual investor access to) the nation-wide airborne geophysical survey.
If it is the case that this investment promotion leads to greater diversification of investment within Malawi’s mining sector, e.g. towards coal, rare earths, and tantalite, then the over-reliance on just one mineral, uranium oxide, and one mine, Kayelekera, can be overcome. The result would be an economic boon to Malawi’s economy and a substantial de-risking to the performance of its mining sector within that economy.
Whereas the NES (Volume 3, Annex 8, p. 34), did specifically refer to the need for one as follows: (the) "establishment of a modern computer-based mineral licensing system (―mining cadastre―) supported by institutional setup, administrative process design, equipment, training and IT system", this was discussed only in indicative terms, i.e. one item that could be identified further to a "sector-wide assessment will inform the design of a multi-year institutional and capacity building program.... The following is a (non-exhaustive) list of components that would be typical of such a program....".
However, by 2016 and the second half of the 2013-2018 export strategy period, the GoM, now led by President Peter Mutharika (elected May 2014), signed an agreement with the private sector company Trimble to design and implement just such a computerized mineral rights cadastre, with the funding coming from the MGGDP. The result will be the MRMS, Trimble's deployment in Malawi of its Landfolio the enterprise scale land management solution.
The story of the intervening years, is told in the first person by respondent David Kienzeler and in the specific context of the MRMS, below, within the first group of stakeholder views that this blog reports on – the GoM.
A. GoM Responses
Two responses were received, the first from David Kienzeler, Fellow at the Columbia Center on Sustainable Investment and Special Assistant (J. William Fulbright - Hillary Rodham Clinton Public Policy Fellow) to the Malawian Ministry of Mines during the period 2013/14, which he writes about below:
"It is very exciting to see such progress on the cadastral system. I had the pleasure of working in the (then) Ministry of Mining in 2013-2014 when implementing a cadastral system along with efforts like the airborne geophysical survey were considered extremely important to Malawi achieving its goal of maximizing its potential mineral wealth.
For a small Ministry, with a hardworking but often overburdened staff, systems like the cadastre are critical for proper management of natural resources. If properly implemented, managed and supported it should help the ministry process license applications, manage revenue collection, and address the serious challenges I saw the ministry regularly face with a paper-based system of managing license data. It should both reduce the workload for and improve the output of my former colleagues.
Globally over the last 15 years there has been a strong emphasis on the need for transparency and accountability around resource extraction. This is particularly critical in Malawi given the issues the country has faced with government corruption. The cadastre will be a big contribution towards making information available to other stakeholders including other government bodies, the public and civil society.
A cadastral system – again, if properly implemented, maintained and supported – improves the efficiency of the Ministry, lowers the obstacles for business and investment, and enhances transparency and accountability. It is an incredibly exciting step forward for the ministry and for Malawi’s natural resources sector that has been a long time coming. I am just sorry I am not there anymore to get to use it."
As reported in the December 2016 edition of Mining and Trade Review (p.6) and noted above, the full MRMS is expected to be in place by March 2017, with the Prototype MRMS already demonstrated to stakeholders at a 2016 workshop held in the national capital of Lilongwe. Trimble's Senior Consultant Charles Young spoke at that event, highlighting the benefits of the MRMS, including that:
Gibson Nyirenda, Head of the Mineral Rights Section at the Department of Mines, warmly lauded this new cadastre and welcomed Young's comments above, noting (as reported by the Review's Chiku Jere, ibid p.6) that the system will provide license holders and other stakeholders 24/7 access, through the online Mining Cadastre Map portal, to information about license holders, related license dates, etc .
Thus the context of GoM responses to my (short) stakeholder engagement exercise is that of Nyirenda's warm welcome to the introduction of the MRMS.
The second GoM response to this short stakeholder engagement was from Fredrick Chanza, Special Assistant to the Secretary to the Treasury in the Ministry of Finance. It reads as follows, and provides an invaluable insight into the way the MRMS is viewed at a senior level of GoM but from a financial, rather than extractive industries line Ministry, perspective:
"The Treasury has been involved in the discussions and planning. We welcome the development and believe that it will assist the country in promoting the sustainable development of the mining sector. We believe it will improve transparency and accountability, enhance security of tenure and title, ease mining audits by the Malawi Revenue Authority and also assist in mineral revenue forecasting.
There are plans that both the Ministry of Finance, Economic Planning and Development (the Revenue Policy Division) and the Malawi Revenue Authority will be linked to the system and be able to access relevant data for revenue and audit purposes. So, apart from the fact that with the improved certainty leading to more productive investment, that potentially results in increased revenues, the system will assist the government to develop reasonable revenue projections, which will in turn aid proper budget planning. Such forecasts combined with forecasts in mineral prices should also assist in macro-economic management, through the implementation of reliable counter-cyclical budgets, better investment planning in terms of sovereign/heritage wealth funds, and foreign reserve funds, which should help us to ensure we have a balance absorptive capacity in the economy (on the assumption that the mining sector really booms at some point).
The cadastre will also aid the effort Malawi is taking on Extractive Industries Transparency Initiative (EITI) as well as promote sensitization among communities, since information will be ready available online. As a result, the country will be assisted to get its fair share from its minerals, and communities will have reasonable expectations, which will lower social risks for investors.
In short, the Treasury has welcomed the development of the cadastre system and believe that we will harness more benefits out of it. With the complement of a Mineral Resources Board and improved mining law (which is currently under review as you know), we believe that this system is timely and will take Malawi forward. The only challenge we face is depressed mineral prices and the presence of minerals that are often traded under off-take agreements and have no directly international reference prices, which makes the issues of transfer pricing a big challenge. Nevertheless, we are building capacity in this area too."
B. Civil Society Stakeholder Responses
Four responses were received from Civil Society, equally the highest level of response with the private sector.
One of the most consistent responses received from civil society respondents was the need for Malawi's various legal, regulatory and facilitating instruments to be mutually supporting and incorporate international good practice. Rachel Etter-Phoya is Head of Accountability, Policy and Programmes at the prominent Malawian NGO Citizens for Justice that hosts the main civil society network on extractives and she is a long-time advocate for Malawi to have the best possible legal, policy and regulatory framework for its mining sector.
Etter-Phoya noted to me that even in 2012 Malawi was developing a mining cadastre, the same year that the NES (published in December 2012) was discussing, incongruously, the development of such a cadastre purely in hypothetical terms; however, funding for this cadastre was not taken beyond its first phase.
More positively, and with regards to more recent developments, Etter-Phoya strongly welcomed that the the Government of Malawi, supported by the African Minerals Development Centre, had hosted last year a three-day stakeholder consultative meeting to review the replacement Bill to the (generally accepted as outdated) 1981 Mines and Minerals Act (MMA) and associated regulations, with a view to their alignment to the Africa Mining Vision (AMV), the AMV being a pan-African policy Etter-Phoya is a strong and public advocate of. For Etter-Phoya, the importance of joining up policy in this way is key hence:
"the online portal is a welcome move by government in the direction of ensuring information on mineral rights is more easily accessible to citizens, but it doesn't go far enough. For example, residents living near to mining and exploration sites would find government monitoring reports for each license far more meaningful than simply the name of the company holding a license, the area, commodity, and duration."
Etter-Phoya is an elected alternative Member representative of Civil Society on the Malawi Extractive Industries Transparency Initiative (MWEITI) Multi-Stakeholder Group, e.g. see page 14 of the MWEITI annual Activity Report for 2015. Her blog, MiningInMalawi, (see above), has nearly 6,000 registered users as of writing this article in March 2017.
Alice Msowoya, the second civil society respondent to this 2017 listening exercise and a former (2012/13) Governance Coordinator of Citizens for Justice, is an international relations and social policy graduate of Lincoln University (UK). Msowoya is motivated by human rights and is a contributing author to the World Justice Project. In response to this listening exercise, she begins her response in a positive vein, welcoming Landfolio as follows:
I think mining cadastre system is a great idea for Malawi especially because it promises greater transparency, accountability, compliance from mining companies and ensures government and the people of Malawi reap benefits through revenues collected through this improved system.
Msowoya continues her response with a clarion call for reform within the GoM, so that that Landfolio can be implemented fully and its benefits actually achieved and accrued for the benefit of Malaiw. Msowoya concludes that “a totally new 'breed' of officials with new and fresh attitudes towards the resources of our country” is required to achieve these benefits. She lists relevant challenges including:
Mysowoya ends on a note of hope and praise for those working hard to bring about benign change in Mining in Malawi through policies and systems that actually work:
“I applaud the efforts of those who are involved in working day and night to bring change and I hope that as they work on the policies and systems in the mining industry, these systems and policies will also instill an attitude that projects from each individual that 'change starts with me'.”
Rajat Hafiq, the third respondent, is the founding Director of the Institute for Policy Interaction in Malawi and founder of Transparency International Malawi Chapter. Hajat is widely and highly regarded for his longstanding civic activism and human rights campaigning, for example see the following 2001 interview on the IRIN website.
In Hajat’s opinion some of the key questions to answer on the introduction of the Malawi FlexiCadastre focus on who will use the new system, who will benefit and “will local communities have the capacity to understand the information and use it to their advantage collectively?” He argues that the current legal framework and draft legislation for mining is inadequate making no provision for Free Prior & Informed Consent Local Community participation and urges that suitable provision is made before granting new licenses. The FlexiCadastre system is not of course a tool for such legislation development but it does offer a more efficient and transparent process of utilising existing and updated license approvals.
Hajat develops further his community benefit perspective stating that GoM has heeded calls for independent competent negotiator teams to agree contract terms with Mining investors whereby the team composition will ensure “that community beneficiation is mainstreamed into any agreement. “ Hajat’s points resonate with several of the concluding recommendations for Extractives Governance in the 2015 book “Beyond Governments – Making Collective Governance Work” ( © Greenleaf Publishing Limited) by Eddie Rich and Jonas Moberg deputy head and head respectively, global secretariat of EITI.
Hajat’s final point is that it is vital that communities and civil society have enough capacity built up to ensure they can “undertake environmental and financial monitoring” when projects get underway. The FlexiCadastre system has capabilities to be an excellent technical tool that satisfies recording and monitoring requirements. As Malawi seeks to gain member status of EITI and compliance with the new 2016 EITI Standard, FlexiCadastre , properly deployed and maintained can be considered to be of great benefit to Malawi’s EITI ambitions.
The final response from civil society - that of Andrew Parker, see below – is specifically that of international civil society.
Malawian Voices, Malawi’s Natural Resources was part-funded by the Scottish Government via the independent and non-political civil society umbrella organisation that it supports, the Scotland Malawi Partnership (SMP), a partnership that works on an equal and reciprocal basis with its equivalent civil society umbrella organisation in Malawi, the Malawi Scotland Partnership.
Andrew Parker is a frequent visitor to Malawi and a Director of the SMP, and is the third civil society respondent quoted herein as part of this 2017 listening exercise. His first comment to me was on the need for GoM to devise and fully implement a policy of staff development to ensure that the benefits of MRMS were realised in whole; in particular he highlighted the need for Malawi as a nation, to leverage for its citizens the best possible deals via the introduction of Landfolio in Malawi, and that its most effective calibration in that regard called for a very high level of civil service capacity. Secondly, Parker argued that in cases (if any) where the strategic nature, or sheer scale of a mining investment called for a bespoke Development Agreement to be put in place, then the GoM should acceded to international best practice in that regard and implement the Model Mining Development Agreement of the International Bar Association.
His final comments I quote verbatim as follows:
"The introduction of the FlexiCadastre system is focused on transparency, which is a prerequisite to secure and responsible investment for Malawi. It also helps secure predictability within the ownership rights system, which too should accelerate investment as clear guidelines become possible. This is a positive development and opportunity for Malawi.
One challenge will be to ensure that property rights which are currently under formalisation remain to the benefit of poor communities who may be less able to put secure their legal rights. Another challenge will be to support the wider investment and infrastructure climate in Malawi which can be beyond one sector or company to solve alone."
C. Private Sector Responses
Four responses were received from my emails from the private sector. The first was from Micheal Yeomans, Director of South East Africa Mining, which is active in Malawi in both Chitipa-Kameme and Misuku. Michael reiterated the responses above with respect to the need for joined-up government, encompassing the full and effective implementation of Landfolio, but is by no means limited to it. He stated:
"Having an up to date properly run Cadastre is a key component for any country wanting to attract investment. It would put Malawi up there with more advanced countries in being electronically connected.
That said the main attraction for investors is the airborne survey with the follow up ground work and the availability of data from that. Put those two aspects, cadastre and data, together and then you really have something to attract new business."
Grain Malunga, the former MP for Chikwawa North Constituency (2009 - 2014) and Minister of Mining (2009 to 2011) who is now a Consultant and Senior Advisor at Paladin Africa Limited (see above), also responded as follows, giving a welcome to the MRMS as follows:
"Some of us are excited with the FlexiCadastre because it will remove discretion in issuance of licenses. There will be online reporting of quarterly and annual reports. Failure to comply with license conditions will lead to automatic cancellation of licenses. This will help to avoid keeping licenses for speculative purposes. The system will also help to avoid license overlap."
The final comment that Malunga makes above reinforces the question of joined-up government: whilst the MRMS will help avoid licenses overlapping (geographically), it is noted that the current 1981 Law actually provides for overlapping mineral licenses, i.e. in the case of exploration licenses for different minerals, leading to a rush to discovery so that an overlapping mineral exploration license can be replaced by an exclusive extraction (mining) license. The draft text, as prepared by Professor James Otto for the GoM, of the replacement Bill specifically excludes this state of affairs - which can, of course, lead to the extraction of a lower value mineral in preference to a higher value one simply due to the discovery of the former happening first.
Hilton Banda and Josephine Muruwesi are a husband and wife team who operate as CEO and Managing Director respectively of their family-led firm Akatswiri Mineral Resources in Malawi. Josephine and Hilton are both professional geologists.
Banda is also the President of the Geoscientist Association of Malawi and has senior civil service experience working for the GoM. Muruwesi was interviewed by Etter-Phoya in 2016, see the MiningInMalawi blog.
Akatswiri Mineral Resources firm was established in 2012 and offers concession development expertise covering geology, geotechnical, mining and environmental activities. In 2016 the firm had six concessions under development for client companies in a portfolio of hydrocarbons, base metal, rare earth metals and limestone. Both geologists separately provided feedback to this listening exercise, their composite responses reflected below, listed against stakeholder feedback questions drawn up by this author further to their specific request:
The final private sector respondent was Tom Kebbie. Kebbie is an Independent Oil and Gas professional and saturation diver who attended St Andrews High School. He is attached to Technip/TechnipFMC and has a strong interest in training. Tom responded to my call for opinions and observation on Landfolio’s roll-out. He points out the similarities in basic oil and gas training with mining and offers an opinion that with time Landfolio can be valuable as it is a real time record of who is doing what and where thus making it easier to identify training needs especially safety and first aid. Tom comments thus;
“I am very interested in the mining sector but purely from the viewpoint of training. That is to say the majority of Malawians employed in these sectors will have a minimum (if any) type of training other than on the job. Safety and first aid training are minimal requirements in the west, this has yet to be a norm in most sub Saharan Africa. The new FlexiCadastre portal can help with identifying who is doing what and where. I think it is a good thing as it is all beginning to have a little more transparency. It could do with being a little more detailed but as it is newly rolled out I have no doubt this will come with time.
The basic training requirements with mining are pretty similar to those of Oil and Gas in that both industries require one to work in hazardous conditions not easily accessible to medical facilities. Safety training and First aid should be the minimum before we start talking about job specific requirements.”.
D. Responses from the Cooperative sector
One response was received from this sector – namely the Mzimba Gemstone Cooperative Society.
Chikomeni Manda is a small-scale miner and member of the Mzimba Gemstone Cooperative Society Ltd. Manda, like many artisanal and small scale miners frequently have poor, intermittent or nonexistent direct involvement with developing government policies and active involvement in initiatives despite they themselves being greatly affected by the policies. Equally it may provide difficult sometimes for governments to reach out and establish fruitful and enduring communications with part time or even migratory workers. Manda stated that he “had heard about” the FlexiCadastre and that, without ever setting eyes on it he expressed belief that it would be a good thing as it will help save time “and it will end corruption”.
The GoM and others in Africa and other continents are making sustained efforts to formalise Malawian artisanal and small-scale mining, e.g. as codified in Malawi’s draft National Artisanal and Small-scale Mining (ASM) Policy. The formation of cooperatives, such as Mzimba Gemstone Cooperative Society, is key to that process. Policy objectives of formalisation, in Malawi and elsewhere, include enhanced legal and regulatory compliance including with regards to environmental sustainability, and the health and safety of the miners themselves. Equally, it is vital that the legitimate mining claims of ASM miners operating within the law be recognised and respected on an equal basis as large-scale mining. Whilst Landfolio does not promulgate mining laws but operates within them, it does have a vital communications role regarding mining licenses that have been issued, presented in the visually appealing form of a map. Currently, in its Malawian prototype phase covers larger scale licenses and not ASM ones; however, to achieve its full efficacious potential then ASM roll-out is also recommended by this author, when it is feasible to do so.
E. Media Industry Response
Stakeholder responses received included one from the media sector, namely from Fanny Kondowe, Radio African Bible Colleges (ABC), Head of Programs which broadcasts from both the national capital, Lilongwe, and from Mzuzu, Malawi’s 3rd largest city and the capital of its Northern region. ABC Radio covers both secular and religious topics.
In Kondowe’s view on Landfolio was that Malawians generally would benefit from knowing what mining in their country was all about. After consulting with colleagues, she reported that the industry and its significance and benefits to Malawians was not generally understood or indeed much of a topic of interest. With the exception of recognizing some references to government statements on the Kaliyekera Uranium mine and Coal mining Fanny accepted that mining was a hidden subject to most. Her conclusion was that, now alerted to the subject an informative blog on the subject would be a good way for her fellow Malawians to understand the topic and an aid to also understanding the impact of the industry on their lives, something that she looks forward to following up on.
The responses from stakeholders indicate a welcome to Landfolio’s roll-out of with the caveat that it must be part of wider developments impacting / assisting the Malawian minerals sector too, e.g. full and user-friendly access to the national aerial geophysical survey of Malawi and ongoing public sector reform.
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