sharing in governance of extractive industries
Government published a new law on mining and quarry operations on August 13, 2018, which some industry players say is anti-business and should be reviewed. But the mines board, the sector regulator, says the new law is business-friendly and seeks to transform the sector, ensure stability, and attract new investors. Stephen Nuwagira spoke to Francis Gatare, the Rwanda Mines, Petroleum & Gas Board CEO and Cabinet member, to discuss the new law. Excerpts;
The new law has raised concern among some sector players. Can you please explain what influenced its making and what it entails?
The new law came out of two processes. Firstly, we had been undertaking reform of the mining sector, starting with the establishment of the mining board as government moved to put new momentum into the sector. When this board was established, we were given the mandate to transform the mining sector, which required us to review our entire policy and regulatory frameworks. To achieve this, we held a number of workshops with stakeholders, including members of Rwanda Mining Association (RMA), to review the policy. We also invited the African Mining Vision team from the African Union and UN Economic Convention for Africa experts to also come and contribute in the discussion. Secondly, when the constitution was reviewed in 2015, one provision required some changes in the Penal Code of Rwanda which saw some of the sectoral offences, breaches and penalties being removed and integrated into sectoral laws. You may have seen this in various laws that could have come out recently; whether it’s the environmental law, land law and other sectoral laws that have had specific offences and penalties in the Penal Code that have since been removed. Like these sectoral laws, there were some offences and penalties associated with the mining sector that previously were in the PC and needed to be integrated into the mining law. This also coincided with the review of the mining industry policies. The changes in this new law come from those two processes; and there are aspects that have to do with breaches and administrative sanctions, as well as offences and penalties that were previously in the Penal Code. In addition, there are some new introductions in new law, which are of a policy nature that resulted from the reforms that have been ongoing many of which were discussed in the aforementioned workshops.
What were the main objectives of the new law that has raised a lot of mixed reactions?
Generally, the objectives of the new law centred around a number of different ideas; we wanted to introduce Penal Code provisions into the law as per constitution; we also needed to streamline many aspects to do with the licensing, rights and obligations of licensed operators; whether there are licensed to carry out exploration, mining, trading etc.; we also had to streamline the nature of licences because there had been different ideas on how licensing should be done. So you will see a more robust licensing regime that clearly outlines the rights, privileges and obligations of licence holders. Another important factor is that we wanted to give specific attention to quarrying. In the previous law, we had not yet articulated the responsibilities of local governments and those of central government and how we work together in issuing licences and carry out regulation given the different layers that interact with quarry. In addition, mining and quarrying activities take place in a physical environment that gets altered; and so this new law needed to streamline the relationship between mining and the environment and the responsibilities (to the environment) of those of us in the sector. After all, while mining is undertaken by private individuals, the environment belongs to the public and if it is interfered with, this has an impact on everyone in society. And so it’s the role of the regulator to ensure that the interest of mining firms does not adversely affect the wellbeing of the general public who benefit from the environment. That’s why the new law needed to bring out the law relationship between mining companies and environment very clearly. The other important aspect is the health and safety of mine workers. Mining has special consideration for health and safety because it takes place in a potentially dangerous environment – working underground in tunnels often with limited light or air, or with workers operating heavy equipment and sometimes using explosives to blast rocks. All these could potentially have harmful effects to the health and safety of miners. In fact, the sector can also sometimes have adverse effects on the health and safety of communities around mines. That’s why it is important to articulate the regulatory framework to ensure the health and safety of everyone concerned. Finally, the law sought to ensure that mining contributes to the development of our country. So the relationship between government and sector players, particularly revenue generation, employment and job-creation, and contribution to industrialisation of the country, needed to be articulated in the new law to ensure the sector contributes to the development of our country. However, there has to be a balance between the benefit to the investors who put in their money to carry out mining and benefit to the economy. Generally, the new law enables the regulator to manage the sector properly; it’s a very competitive law that was drafted with stability in mind.
Sector players raised concern about Article 55 and are already calling for its review. What do you say to these concerns?
You may notice that what the mining firms are commenting on mostly is the offenses and penalties aspect; this is very interesting because it’s not a new provision. Actually, I was quite surprised that they raised this issue because the Penal Code was more strongly worded than the new law. For instance, on the issue of criminalisation of accidents, the Penal Code provided for life imprisonment, but we needed to make it more business friendly. So, many of the mining accidents or breaches of standards that will occur will most likely fall under administrative sanctions, but not criminal sanctions. However, when someone has been injured; extreme environment degradation or water contamination has happened or death occurs; let’s ask ourselves this question; in the event that a mining firm contributes deliberately or negligently to these accidents, should anyone really expect that there should not be any consequence? After all, this is how society is governed. When individuals have either willfully, negligently or otherwise contributed to such accidents, they have to be accountable. It’s in that context, but that level of accountability is decided on by the courts, it’s not for us or any individual to decide. So, there is no criminalisation of mining accidents, but when courts decide that the individuals are culpable, then they need to be accountable. So, the new law is timely and we believe it will help make the sector safer for all stakeholders because it is promoting prevention. This is against the backdrop of the more than 90 fatalities caused by mining activities in Rwanda last year. But there are rarely any deaths reported in other countries because they invest more in safety measures, and use modern tools. So, there will be a cost for firms that won’t comply with the law; but we will work with players to help them achieve what is required by regulation.
Mining companies have been complaining for long about the reluctance by banks to fund their activities. Why doesn't government put in place a fund to support miners like it has done for real estate sector?
It is still difficult to finance the mining industry because of artisanal mining and artisanal mindset; and the only way for firms to access funds now is by providing collateral. However, if firms operated professionally, it would be easy to get funding. For instance, if you conduct geological studies to know the estimated volumes of the resource in your concession, you can use the data to attract funders. That’s why we must move toward that direction (professionalising sector) in the long-term, and government is helping to conduct geological exploration and also in repatriation of geological information from Belgium’s Museum of Central Africa. Otherwise, it is now hard for government to put in place a fund to support the sector when there is low information on volumes of deposits of the different mineral resources.
How far is the repatriation exercise of Rwanda’s geological data from Belgium by the mines board?
The geological information that will soon be repatriated from Belgium’s Museum of Central Africa include documents, maps, reports of mining firms that were working in Rwanda during colonial times, which gives their views on the sector. There are also soil samples collected by UNDP from across the country which we believe will be very useful going forward. In fact, some of this information will be important for training in geological studies in colleges and universities. There are almost 40,000 documents altogether that will be repatriated.
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