sharing in governance of extractive industries
Malawi’s long-awaited Mines and Minerals Bill is expected to be tabled this sitting of parliament. But key changes still need to be made.
The law was drafted on the back of a loan from the World Bank. In 2015, those of us labelled ‘stakeholders’, i.e., miners, activists, academics, chiefs, civil servants and parliamentarians, gathered at Capital Hotel to review the draft. Amid mint chewing and buffet eating, we proposed over 140 changes to the Bill for consideration by the consultant, an American professor.
Some important improvements were made. For example, women’s participation in employment and training must be promoted by large-scale mining companies. Yet the version of the Bill that made it to cabinet and will be tabled in parliament looks uncannily similar to the version that was shared during public consultations.
First, let’s take the Mineral Resources Committee. This committee is set to decide which applications for mining licences are successful. Only civil servants – principal secretaries, directors, and the inspector general of the police or their representatives – sit on this committee. There is no public or parliamentary oversight and no publication of minutes required as the Bill currently stands. Publication or disclosure is expressly prohibited apart from with written consent from the commissioner.
The ongoing Anti-Corruption Bureau investigation into payments believed to be connected to the very unusual oil contracts that were signed in a hurry before the last election is but one example of why improving public oversight of this committee is vital. Transparency will ensure licences are given to the best applicants and creates a more level playing field for the private sector; it also protects the civil servants making decisions from political and corporate interference.
This committee even has powers to ‘dispense with consent’ when it deems consent is being ‘unreasonably withheld’. Yes, this undermines your right to withhold consent if a mining licence overlaps with land you occupy, own or farm.
Public access to information has been notoriously difficult in the mining sector. It took 10 years for the government to finally publish the 2007 agreement for Kayelekera Uranium Mine – a decade after Paladin had already disclosed the fiscal terms on the Australian stock exchange. Shareholders around the world knew more than Malawians about the terms of uranium production!
Thankfully, the government has now committed to make all contracts public through the Extractive Industries Transparency Initiative, but the Bill does not make this binding. You can look at Malawi’s mining and oil contracts for yourself on www.resourcecontracts.org.
Other clauses should be improved to give immediate access to information and data that is in the public interest including about the risk and safety of employees, members of the public and environment. This should apply to reports produced both by companies and government.
Finally – but only because space is limited here – we have one chance to make sure minerals contribute to national development for this and future generations.
As you know, you can plant tobacco and maize annually, but uranium and coal doesn’t grow so easily. In exchange for giving companies the right to extract Malawi’s non-renewable resources, the government levies a number of taxes including royalties.
Countries that have benefited from mining over the long-term have something in common. They manage revenue well and differently from revenue derived from other sectors. There is a clear plan and strong oversight about how and when to spend, save and invest the money.
Granted, revenue collected from the sector is almost insignificant, less than 1% of GDP last year. Yet we need to make sure this and future revenue collected by the Malawi Revenue Authority does not just go into the general government pot (the consolidated fund) used for the annual budget, but is treated with the respect it requires.
This op-ed was featured in The Nation, 21 November 2018.
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