Dear Gwendolyn

This is a very disturbing information indeed. For all the talk on transparency in extractive industries some companies still struggle to come out clean on trusts and how they are managed. This reluctance to disclose info  is a recipe for unhealthy community relations and everyone is aware of it. It's a case of tempting fate by people who historically should know better.

Could EITI do something to get all these rogue companies and their avatars (Trusts) to mend their ways? ...naming and shaming

Hi Gwendolyn,

Thank you for this very interesting one dwelling on the affected mine communities I briefly shared on before here: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwjgqIzHgfXUAhUcOsAKHVBsA5wQFggjMAA&url=https%3A%2F%2Fafricanexecutive.com%2Farticle%2Fread%2F7394&usg=AFQjCNEiSP5UeD-Q3suRdqyFPrdBv-eLpA

Expected a national law would guide how the national share of mineral revenues would be allocated to the directly affected local, district, regional and national community, and utilized sustain-ably and most effectively for the maximum benefit of all throughout their generations the revenues belong to.

Such  law would also required the allocations of the national share of mineral revenues  to be deposited in sovereign wealth funds of the directly affected local, district, regional and national communities, who would be trained how to manage and exploit them most effectively and sustain-ably for the maximum benefit of all throughout their generations.

Mine community trusts are not good enough for the communities they would maintain on dependency in their development and living endevours.

Hi Antipas

DRC has such allocations stipulated into the Mining Code...but it still not happening! I believe Tchad had similar laws on oil but it hasn't been implemented in the name of national sovereignty. It boils down to governance and stewardship. Laws, surely are very important but more is needed.

Dear Mulya and Antipas,

Thanks for your very thought-provoking comments.  The post deals primarily with what is happening in South Africa at the moment, and I do not have sufficient information and knowledge to comment in any way on what is happening in most other African countries.  

I am currently reading through a report published recently that refers to the billions (in South African Rand) allocated to these trusts by the 100 top companies listed on the Johannesburg Stock Exchange.  These companies are from various sectors and not just mining.  Whilst I still need to finish scouring the report and another one produced by the same agency two years ago, I can already see that it reveals the same problem: companies are lauded for the amount of money spent for communities, but no evidence that any amount of much significance is really spent in a sustainable manner in the affected communities.  From where I stand (and based on my experience and observation to date) it is only the administrators and consultants who benefit from these millions.

The reason for the non-transparency in these trusts and foundations, even when these are formed by a listed company, is the loophole (at least in South Africa) that these companies are not obliged to share this information publicly because the trusts and foundations are 'independent' of the company.  I think that is absolute nonsense and I continue to push the specific company mentioned in my post to release the information.  They have now invited me to a meeting on the 19th July but still no information forthcoming.  It is quite disturbing.  

I agree with you Mulya that laws are important, but as we know, a law is only really useful if there is political will and when adequate resources are made available to implement it properly, and I think that is where many countries fail.   

Hi Gwendolyn

What you saying about the legal independence (of convenience) of these trusts from companies which pump billions of rand in to them reveals a even more shocking situation than I thought first.  It'd be very interesting to compare the names and profiles of these trustees across those 100 top companies...and check if some funny pattern would emerge. Perfectly understand your indignation.

Hi Mulya,

Indeed I think there is a lot of investigative research to be done on this topic, not only in SA, but across the continent. I intend to keep pressure on those companies where I can do so as a shareholder, while also looking at the topic from an academic perspective.... if only days had more hours in them... :-)