MAC: Mines and Communities

Tanzania: No new mining pacts, House team pleads

Published by MAC on 2008-11-10
Source: IPP Media (2008-10-30)

No new mining pacts, House team pleads

The Parliamentary Committee on Energy and Minerals has urged the government to refrain from signing any new mining contracts before the House endorses amendments to the Mining Act. Bumbuli legislator, William Shellukindo, floated the recommendation when presenting the views of the committee on the report of Presidential Mining Sector Review Team in the National Assembly here yesterday.

The MP, who chairs the House committee, called for maximum transparency when it came to the signing of mining contracts.

The review team admits in its report that business contracts seem to be above the law, which it describes as a violation of the principles of good governance. "The validity of mining contracts should be reduced to 10 years, pending review, unlike now when they last as long as 25 years. The committee recommends that the said contracts should be reviewed every five years to enable it to be in tune with global economic changes," observed Shellukindo.

He said there were also problem in cases where mining companies export raw minerals for purification, adding: "The issue has led to a lot of questions, with people wondering whether it is really true that our country cannot process these minerals." The MP further observed that his committee was convinced that there was no reason for the refinement to be done outside Tanzania and urged the House to advise the government to enact a law "within a year" banning the exportation of raw gemstones.

Turning to the issue of compensation, Shellukindo said there were numerous cases of investors paying "peanuts" or nothing to residents relocated from mining areas.
"The land owner should be given a chance to negotiate with the investor under the supervision of an officially appointed competent authority. The investor should not start mining activities before compensating the local residents concerned and making sure that they have been resettled," he told the House. "Compensation should go concurrently with the value of the land, the land owner`s property, and other costs related to the eviction exercise. The investor should pay compensation in less than six months from the time the property is evaluated" he added.

Commenting on the issue of employment, Shellukindo said there were long-running complaints that some expatriates in mining companies were earning many times more than local employees. "The government should go revisit our labour laws to ensure that wages are purely commensurate with qualifications and experience and not otherwise," he noted. The House yesterday started deliberating on the review team`s report, tabled during the June-August budget meeting, which recommends sweeping measures to change the way the mining sector is managed. If it is adopted, it will become an official legal document to be followed by the enactment of a law providing for the implementation of the recommendations endorsed by MPs.

Retired Judge Mark Bomani chaired the review team, whose recommendations include the overhaul of the mining sector and the establishment of an authority to oversee all mining ventures in the country. The team also calls for a review of taxes and royalties paid by multinational companies as well as joint shareholding between the government and investors in new mining projects.Members of the team included legislators Zitto Kabwe (Kigoma North - Chadema), Dr Harrison Mwakyembe (Kyela - CCM), Ezekiel Maige (Msalala - CCM), and John Cheyo (Bariadi East - UDP). Among the others were Peter Machunde of the Dar es Salaam Stock Exchange, David Tarimo of PricewaterhouseCoopers, and Maria Kejo, director of civil and international law in the Justice and Constitutional Affairs ministry.

Also on the team were Salome Makange, chief legal officer in the Energy and Minerals ministry, Mugisha Kamugisha, commissioner for policy in the Finance and Economic Affairs ministry, and Edward Kihundwa, assistant director for human settlements in the Lands, Housing and Human Settlements ministry.

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