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Tuesday, September 27, 2022
FREETOWN, Aug 26 2008 (IPS) - In December 2007, unrest broke out in the diamond mining region of Kono in the east, between kimberlite mining corporation Koidu Holdings and locals in the lease area. The company had promised to relocate hundreds of community residents to make way for its mining operation but the slow pace of implementation of this pledge, coupled with the repeated blasts of dynamite in underground mining sites set the company and its hosts on a collision course.
The confrontation resulted in the deaths of two persons and injuries to many others. The government was forced to close down the company's activities, amidst public protests. Koidu Holdings is yet to resume operations.
Under the existing mining laws, exporters of diamonds, for example, pay three percent of their export earnings to the government. This is the standard royalty levied on mining profits across the continent; it has been roundly criticised by activists who see this as insufficient enough to address the needs of the host communities. Of the three percent tax, barely 0.75 percent returns to the mining communities for infrastructural and community development, as well as rent for the leased lands.
Last month, the Sierra Leonean government set up a presidential task force to review the country's mining policies, but activists are complaining that their voices are not being heard.
According to Abdul Sanu, the Public Relations Officer of the Ministry of Mineral Resources: "The government deemed it fit to review all mining arrangements with the aim of improving them so as to serve the best interests of the country and its people and also to avoid confrontations between corporate mining entities and local communities, incidents which have resulted in unrest and loss of lives in the past."
Sanu says that his ministry is determined to make the new mining laws attractive both to investors and the country's population. "The government has as its primary interest the people, especially the host mining communities."
"It is not just about setting up a selected 'Task Force' that does not take into account the concerns of organisations monitoring the extractive industry as well as the views of the affected communities.
"A lot of factors touching on the interests of land-owners, the adequate payment of royalties, lease agreements, corporate social responsibility and a host of others, have to be taken into consideration."
Theophilus Gbenda, chair of the Association of Journalists on Mining and Extractives, one of the partners in a coalition of activists monitoring mining and the extractive industry, told IPS, "The task force must review and make public all mining contracts, ensure environmental protection is treated seriously and involve communities and civil society in all matters relating to mining."
Leading civil society organisations gathered in a conference in Freetown last week which focused on the review of the country's mining laws. In their position paper, they urged the government to solicit the input of a broad range of civil society in formulating new policies.
At present, only three CSOs are included in the presidential task force, the most outspoken one being the Network Movement for Justice and Development. It too is finding it hard to put through the general position of activists in the extractive industry, according to its representatives.
The civil society position insists that "no political or other undue pressure or interference is exerted on members of the Task Force, whether by government officials or mining companies."
It also calls for suspension of further negotiations of mining agreements until the task force's review has been completed and published.
It is not clear when the review of mining policies will be completed, but the coalition says sufficient time should be allowed and a specific channel be set up for soliciting contributions from civil society and residents of mining communities.
The key minerals mined in Sierra Leone are diamond, gold, rutile or titanium oxide and bauxite. The agreements signed with transnational mining companies have often proved unfavourable to the government and people, with the state often accused by activists of colluding with the mining companies.
According to Mboka, the main rutile mining company in the south, Sierra Rutile, bagged an exclusive deal with the government in 2003, that grants the company a tax holiday till 2014. This exemption from a range of tax obligations, according to the activist, was only discovered via a leaked memo. Officials of the Mineral Resources ministry have declined to comment on the issue.
The coalition frowns at these "stabilisation and confidentiality clauses" which are not open to public scrutiny, but believed to be widespread in the industry. Activists argue that such agreements prevent the state from generating more revenue from mining and hampers transparency in the mining sector.
Mboka insists all mining rents or leases should be paid per hectare as opposed to flat annual fees and that taxes should also be reviewed in order to meet the demand and value of all minerals.
Meanwhile, as activists challenge the presidential task force on reforms in the mining sector, industry players who are left out of the review process also express concern.
Banu Jubateh, a large scale alluvial miner in the eastern district of Kenema told IPS: "I hire a caterpillar machine for $1000 for eight hours, to open up mining sites and have to care for dozens of my miners and their relatives. So any adjustment in the laws that are unfavourable to us miners would simply discourage me. It is not that one always finds diamonds, sometimes I run at massive loss."
Exporters, too, are worried. Kassim Basma, a Lebanese national who has been exporting uncut Sierra Leonean diamonds for more than 15 years says business is not as good.
"Before the 11-year long civil war, fought between 1991 and 2002, we had more than 14 exporters. Now, there are less than six; so this tells you how the business is going. Any more taxes or conditionalities put on the way of exporters may well be too much and discouraging," Basma laments.
The government is currently training mines monitors in readiness to police the mining regions and border posts when the new mining laws come into effect. The aim here is to minimise smuggling and help the government generate more revenue.
There are also efforts to harmonise mining policies taking place at regional level, through the Economic Community of West African States (ECOWAS). A mining code has been drafted and several meetings to solicit comment from civil society have taken already taken place.
This policy development is being driven by Oxfam America, which controversially signed a Memorandum of Understanding with ECOWAS in April to develop the new mining code.
While Oxfam insists that it is merely as a facilitator of the process, the Accra-based Third World Network Africa (TWN) questioned the international NGOs role. A strongly-worded letter to the ECOWAS president condemned the MOU as "colonial and patronising", saying that the arrangement threatened to both undermine ECOWAS' relations with citizens and civil society in the region and fail to benefit from ongoing review of regulation of the mining sector elsewhere on the continent.
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