MAC: Mines and Communities

New Mining Code in Madagascar must not Sacrifice the People

Published by MAC on 2015-09-01
Source: Statement (2015-08-20)

The New Mining Code Must Not Sacrifice the Malagasy People in Order to Please Investors

TANY Collective, Paris

20 August 2015

A process to revise the Mining Code of Madagascar is currently going on behind closed doors. Civil society organisations (1) have denounced the lack of a formal framework regulating the meetings of the review committee linked to the Ministry of Mines. Despite this, the Malagasy authorities plan to present the new mining bill to international investors attending the International Forum on Madagascar Mining and Petroleum on 23-25th September 2015 in Antananarivo (2).

Since 2005, Madagascar has been considered the "new Eldorado of mining and oil companies". This is partly because of the country’s Mining Code and its Large Mining Investment Regime, which give significant benefits to mining and oil companies and leave only pennies to the state, municipalities and local communities.

However, the first draft of the new mining bill (3), which when completed will replace the two current pieces of legislation, goes even further in granting more to large investors, both national and foreign, and overstepping the national interest.

The TANY Collective denounces this unhealthy logic which jeopardizes small mine operators, local communities and future Malagasy generations.

Mining permits and land titles: projects which promote land grabbing

From the outset, the draft perpetuates the threat of dispossession of land rights. This risk, already present in the Mining Code of 2005, has turned into reality in many cases documented by the TANY Collective in several regions of Madagascar (4) and (5). As victims of land grabs in the mining sector, local communities have suffered evictions, loss of legal rights and low and unacceptable compensations.

In the third paragraph of article 1.1 , the bill stipulates that "No holder of a mining permit can set up or proceed with an extraction operation [in the framework of an exploration or exploitation activity] on a site within its mining perimeter without being the [land] owner of the site or, failing that, without having completed the process to identify and inform the owners and having agreed upon a lease or other arrangement with the landowners or with the local authorities."

This point, which was already contested by a group of civil society organisations in Madagascar (1), could seriously harm Madagascar’s national sovereignty. In fact, this draft article 1.1 rules that mining companies, especially foreign and transnational ones, could become land owners instead of merely extracting subsoil products for a limited time period.

This dangerously reduces the land heritage for future Malagasy generations.

Since many years, TANY has been denouncing law 2007-036 which allows foreign companies to buy and acquire lands and therefore become full-fledged owners. By doing this, the law broke a taboo and conflicts with the current land code which does not allow foreigners to become land owners. In fact, in order to bypass this obstacle in the code, a number of foreign investors have acquired Malagasy nationality over the last few years (6) without necessarily having lived permanently in Madagascar.

These factors exacerbate the rush to give land ownership to investors at the expense of the overwhelming majority of citizens.

As they don’t have a history of residency, large mining companies are forced to acquire land titles. For the majority of Malagasies, land titles are inaccessible due to their high cost. It also takes many years to obtain them.

Companies, however, especially foreigner ones, benefit from the unrivalled support of the EDBM (Economic Development Board of Madagascar) a structure which was put into place in 2006 with funding from the World Bank in order to “reinforce the competitiveness of the national private sector, increase foreign direct investment and provide support services to investors as they set up.” (7) In these conditions, investors can easily acquire lands.

If article 1.1 of the draft is maintained, only very rich nationals and foreign companies will be able to undertake mining activities. The outlook is very worrying. The document “The state and outlook of the extractive sector”, recently published by the TARATRA Project (8) explains that “Since Madagascar has an area of 595,000 km2, if we assume the logic that a mining company could have access to 10,000 km2 [with an exploration permit], this means that 60 companies could cover the whole territory of the country. Madagascar is the only country which allows access to such a large area of land, blocking other initiatives.”

Criminalisation of protests: the drive to undermine local resistance

The draft goes even further with its agenda to protect the interests of mining corporations. In a scandalous fashion, it criminalises protest movements despite the rights and freedoms of the local communities who are affected by the negative impacts.

Land grabs, low or missing compensations, broken promises made by mining companies during mediation meetings, have driven local people to protest.

From now on, articles 164 to 170 of the Mining Code, which deal with violations and penalties, will put illegal miners, thieves and handlers of stolen mining products together with protestors in the same basket.

In article 167 of the mining bill, protestors are clearly targeted and their actions will be subject to extremely harsh penalties with no option to appeal: “Groups of people who invade and occupy legally established mining territories in order to undertake activities which will prevent permit holders from exercising their profession or rob them of their rights, are committing a crime and shall be punished with a sentence of forced labour from five (5) to twenty (20) years and a fine of 15,000,000 to 150,000,000 ariary.”

In order to wipe out all resistance, the draft adds an article 170-4 which aims to punish elected officials in local municipalities who support protests by local communities as has happened in the past. "People who are members of the board and of the executive body of decentralized local authorities who are complicit in the violation of mining perimeters, trespassing, illegal mining activities and rushes, as indicated in articles 165 to 170-1 above, are punishable by the same penalties as others, with an aggravating circumstance.”

The criminalisation of local resistance serves to protect mining projects regardless of the harm they may cause to neighbouring communities as well as to employees. Yet several matters are likely to provoke demonstrations now and again. Take for example the dismissal of 1,100 employees in Ambatovy (10), allegedly due to the fall in the price of nickel, or the early termination of workers by the subcontractors of QMM-Rio Tinto (11), which is mining for ilmenite. It is illogical to issue ilmenite mining permits to other companies while the multinational which is already extracting this mineral in Madagascar is slowing down production and laying off workers due to the falling price on the world market.

The state and investors tell people that allowing mining companies in will bring "development". But the companies already operating in Madagascar do not hesitate to sacrifice workers as soon as their interests are at stake.

A “guarantee of stability” to further benefit mining companies

The irreversibility of property rights given to mining interests is reinforced by article 154 which gives “mining investments” a “guarantee of stability” which applies to “legal, financial and custom regimes as well as currency exchange.”

In contrast to other countries that are trying to reach a proper balance in the distribution of mining royalties (12), the renegotiation of contracts is almost impossible in Madagascar under the current Mining Code. The draft mining bill takes this even further going by authorising exceptions to this rule when it will benefit the mining companies… “The investor can seek more favourable measures which may be applied after the date of the option for stability. New measures which may be less favourable than those in place on the date of the option will not be applied to the investor.” (article 154-1)

Towards uranium mining in Madagascar

In a remarkable new move, the draft mining bill adds uranium to the list of minerals mentioned in its General Provisions under article 8 concerning the “exploration, extraction, processing, packaging, transportation and marketing of uranium and thorium ores, which are the subject of State treaties in accordance with a model treaty defined by regulation.”

The exploitation of uranium causes serious harm to human health and to the environment, yet the capacities and skills of communities and institutions in Madagascar in terms of safety, protection and security are still weak.

The inclusion of a section specifically dedicated to uranium within the draft mining bill is not an insignificant matter. Faced with the risks posed by radioactivity and the related devastating consequences, the TANY Collective calls for vigilance of the highest level whilst time is taken to find a responsible way of dealing with these issues and deciding whether or not to initiate certain mining projects in Madagascar.

Conclusion

A critical analysis of these initial points of the new mining bill does not bode well.

It shows that the new laws risk causing uncontrollable damage and exhausting underground mineral resources in Madagascar, without which the Malagasy nation will be financially unsustainable.

It also shows that the authorities and current officials are overreaching in their attempt to attract investors (4,000 new permits are in the pipeline) by offering a mining bill which risks legalizing a fire sale of the country’s mineral resources.

Therefore, the TANY Collective:

- reiterates its demand for a moratorium on the issuance of mining permits, i.e. a suspension of their issue for an indefinite period, thus supporting a proposal already made by civil society organisations in Madagascar and by the conference of Catholic Bishops ;

- demands a rewriting of the draft mining bill through the establishment of a more formal, participatory and inclusive working group;

> taking the time to exchange and to rebuild each point of the law in favour of a fair and equitable distribution of benefits among the local communities, the whole of the Malagasy nation and the mining companies,

> bringing together the representatives of the different people involved in a more organised and transparent way, under “a regulatory framework to legalise and formalise the currently unclear existence of Conceptual Committees" (8) whose improvised working methods and changing meeting dates make the presence of representatives of civil society organisations difficult.

The review work carried out to prepare the draft mining bill is still incomplete. Several articles relating to Title V- Obligations attached to the exercise of mining activities have not been developed until now. This is the case for Article 94-3 (Obligation to contribute to socio-economic development - CSR and “social protocol”), article 94-4 (Obligation to give priority to the hiring of nationals) as well as article 94-5 (Obligation to transfer skills: training costs, ongoing staff training).

Strengthening these articles would be to the benefit of the Malagasy people. In this regard, the TANY Collective demands:

- public consultations in the different regions allowing for criticism and suggestions from labour unions from the different mining companies as well as from local communities living in areas where mining companies are prospecting or extracting minerals in Madagascar;

- formal and official national meetings of dialogue and exchange between the state, civil society and those involved in the economic and social wellbeing of the country in order to reflect together in a deep and serious manner on: a national mining policy that manages and protects resources; a fair distribution of benefits linked to a strategy of economic development in all sectors and training of human resources; respect for human rights; and the duties and responsibilities of the various parties.

The vision of the "Framework Document for a National Mining Policy" of the MPRS – Ministry under the President in charge of Strategic Resources - from August 2014, states that "A sustainable mining sector, managed properly, can provide a source of income that puts poverty in the past and can be shared with future generations." The mining bill contradicts that vision.

In its current state, the text serves only to further the interests of mining companies at the expense of the higher interests of the Malagasy nation.

Paris, 20th of August 2015

The Collective for the Defence of Malagasy Lands – TANY

patrimoine.malgache[at]yahoo.fr
http://terresmalgaches.info
http://www.facebook.com/TANYterresmalgaches

References:

(1) Communiqué CRAAD-OI et autres OSC, La société civile relance le processus d’élaboration d’une charte tripartite pour le développement durable et le respect des droits humains dans le cadre des investissements privés à Madagascar, - 28 mai 2015: http://www.madagascar-tribune.com/La-societe-civile-reclame-une,21151.html

(2) http://www.theenergyexchange.co.uk/event/1st-international-forum-madagascar-oil-mining/endorsement-letter et Africa Mining Intelligence 7 aout 2015

(3) L’avant-projet n’ayant pas été diffusé au grand public, nous avons reçu différentes versions de diverses sources mais leur contenu est fondamentalement identique.

(4) Re-Common, Solidarité des Intervenants sur le Foncier, Collectif TANY, Les accaparements de terre à Madagascar – Echos et témoignages 2013 : http://terresmalgaches.info/IMG/pdf/Rapport_Accaparements_de_terres_Madagascar_2013.pdf

(5) Non à l’extractivisme : Newsletter n°38 : http://terresmalgaches.info/spip.php?article91

(6) M. Pellerin, Le nouvel essor des relations entre la Chine et Madagascar, Notes de l’IFRI, mars 2011

(7) Economic Development Board of Madagascar http://www.edbm.gov.mg/fr/L-EDBM/Mission-Objectifs

(8) Projet Taratra, Etat et perspectives du secteur extractif, 12 aout 2015, https://www.facebook.com/pages/Projet-Taratra/416457341836685

(9) Article 23 du Code Minier et de l’Avant-projet

(10) http://www.industriall-union.org/fr/madagascar-des-tentatives-de-suicide-apres-les-licenciements-chez-sherritt

(11) http://www.lagazette-dgi.com/index.php?option=com_content&view=article&id=33262:secteur-minier-licenciement-massif-chez-un-sous-traitant-de-qmm&catid=45:newsflash&Itemid=58

(12) http://www.contratsminiersguinee.org/blog/communique-mis-en-place.html, http://www.rfi.fr/emission/20140125-le-burkina-faso-renegocie-contrats-miniers, http://www.voxafrica.com/info/video/0_hphah877/niger-niamey-renegocie-les-contrats-miniers-avec-areva/

(13) https://www.oecd-nea.org/ndd/pubs/2014/7064-mehium-es-fr.pdf

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