government

The utilization and exploitation of mineral wealth in any country is undertaken under the administration and direction of the presiding government.

It is acknowledged that these governments act in a representative capacity having been tasked as stewards of and on behalf of their citizens.

AUTHOR: Selina Zhuwarara

International law reiterates this duty through the United Nations General Assembly Resolution 1803 which emphasizes state sovereignty over its natural resources and the mandate for such resources to be used in the furtherance of national interests and development and for the well being of the people of the state concerned.

Therefore, every time a government negotiates on a mineral resource project or structures policy for the exploitation, sale and use of natural resources they are doing so as an agent and with the ultimate purpose of unlocking benefit and development for all its citizens.

While governments generally always act in a representative capacity, their role as agents in the mineral resource sector is a scenario of special note because they preside over assets that are non-renewable.

Once a deposit is extracted, disposed and depleted its potential cannot be revisited.

Each deposit embodies a single chance of maximizing the potential and benefit that can be derived from its existence.

Following the same, it is important to review the capacity of citizens to influence the decisions made by government in managing the sector and how such views can be successfully integrated into the sectors development trajectory.

A presumption normally exists that governments always know and can interpret public interest, or that the solutions they proffer will satisfy public aspirations.

However, the tensions’ popping up in the mining industry between communities, governments and companies in Africa shows that there may have been a lapse of relatedness at some point.

Indeed, even the strong emergence of the artisanal sector on the continent shows that the industry requires re-structuring. There have been various efforts to restructure the industry which have recorded moderate to weak improvement.

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An important question therefore emerges as to whether the pool for ideas and minds structuring the industry should be further expanded to give citizens a more definitive chance to share and influence the sector.

It is strong contention that it may be worthwhile for governments to acknowledge that citizens require better insight and space to proactively influence the industry for policies to speak and offer answers to the questions, problems and aspirations of the day.

One common feature of any democratic system of governance is the existence of a Parliament. A body that is made up of elected officials representing all the constituencies and the electorate within a country. In other words, this is the closest an ordinary citizen can have a front seat to actively contribute and participate in governance structures.

In an ideal scenario there is timely feedback from the electorate through their representatives such that the functions of House are always guided by the matters of the day.

There are various methods that can be utilized to mobilize the views of the public however, the Parliament is the most effective and wide reaching vehicle that can collect and consolidate the views and aspirations of citizens and further enforce these aspirations into the regulatory and governance framework of the State.

One of the duties of Parliament is to keep an eye on actions of the State. In order to effectively undertake this wide-ranging function of oversight Parliament usually constitutes “Portfolio Committees” that shadow and cover every area presided over by designated Ministries.

Through these Committees, Parliament can review the actions of government and make recommendations on improving governance workings and systems.

For instance, in Zimbabwe, the function of watching over the mining industry is tasked with the Portfolio Committee on Mines and Energy. The Committee has been very active in its function of trying to shape the social, economic and governance issues in this sector.

Several hearings have been conducted over the last few years that have taken government to task over certain administrative and executive decisions in the mining industry.

However, it is my view that the powers of Parliament to investigate and constitute Hearings is primarily retrospective and should be coupled with mandatory authority to have oversight and participate and influence the process of crafting policy and in the review of mining contracts prior to finalization by the State.

At this stage Parliament can have sight and proffer advice in relation to various issues such as the appropriateness and adequacy of the commercial, social and environmental provisions being bargained.

It is important to recognize that policy, laws and legal instruments concluded in the furtherance of commercial interest in the sector all together represent the foundation of any mining sector.

Structured purposefully these instruments can drive economic and transformative development however; when they are ill-structured it results in a dysfunctional framework that stifles the ability to harness and maximize the potential of possessing mineral wealth.

It is therefore important to get these basic instruments right from the onset in order to achieve effective utilization of mineral resources.

Whilst Parliament has the sacrosanct role of legislating, therefore directly influencing the rules that guide the mining sector, it is not always afforded the space and definitive mandate to proactively oversee aspects of critical decisions that are made by the Executive.

The ethos behind the principle of the separation of powers is that different arms that make up the state, that is the Executive, the Judiciary and Parliament, are separated and run independently in order to act as window for checks and balances, constantly watching over the other.

This function of oversight should be emphasized in the mining industry because of the nature of the sector and the magnitude of potential loss to current and future generations when the country enters bad deals or rolls out bad policy.

To date the performance of the mining sector in Africa and its impact on the attainment of broad based development has been weak and part of that weak performance is owing to governments not opening up the platform for wider views and ideas into the management of the industry from their own people.

Given that Parliament is the ultimate expression of public representation; it should be afforded the opportunity and space to infuse its view and recommendations into continuing processes that shape and set the tone for the sector.

There is more room for Parliaments to play a stronger role in ensuring that there is inclusive and efficient governance of the sector.

There are very few mechanisms that can efficiently and effectively impart instruction and guidance from public interest and sentiment in the manner offered by the structures and powers of Parliament.

In 2017 Tanzania enacted two important pieces of legislation, the Natural Wealth and Resources (Permanent Sovereignty) Act and the Natural Wealth and Resources Contracts (Review and Re-negotiation of Unconscionable Terms) Act.

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The Natural Wealth and Resources (Permanent Sovereignty) Act makes the important declaration that government is only a steward of natural resources for and on behalf of the people of Tanzania.

This position reinforces the basis of accountability and ensures that current and future governments are reminded of the duty to actualize and prioritize the aspirations of its people through its natural resources. It’s always important to re-state this seemingly obvious point.

If left unstated it is easy for administrations to lose sight of the duty to ensure that ordinary citizens can always positively relate to the benefits of mineral resources and for the need to deliver products of wealth that transcend generations.

The Act further states that all organs, persons or authorities exercising executive, legislative and judicial functional shall be required to take cognizance of the provisions of the Act.

To always prioritize the interests and indelible rights of the people of Tanzania in any arrangement concerning the exploitation and development of natural resources which resources should be used for the furthering of the independence and self reliance of the country.

Considerable criticism has been raised over the potential impact of various resource nationalist initiatives that Tanzania has made over the last three years; however it is important to look beyond the procedural and technical provisions to give thought to the trend of thought that is now prevalent in many mineral rich countries in Africa.

It is important identify that there is an acknowledged consensus that mineral wealth has not achieved what is should for these nations and has developed in a manner that has left a feeling of disconnection and alienation of ordinary citizens in its workings or wealth.

Following from the same, frustrations have increased and a fundamental shift in mind set and governance has become necessary. This pressure on governments to deliver fundamental change is not only necessary for economic stability but has become critical for political and social stability as well.

It is inevitable that mistakes and adjustments will be made during this movement for change however, is important for the minerals industry to acknowledge, embrace and anticipate these changes to guide them towards sustainable goals.

The Natural Wealth and Resources Contracts (Review and Re-negotiation of Unconscionable Terms) Act of Tanzania goes on to spell out the expected role of Parliament in the finalization and oversight of any contracts relating to natural resources.

This Act gives Parliament the mantle to review and make recommendations of existing contracts and the terms being negotiated in any current contracts prior to finalization.

Any terms which are found to be unfair or likely to jeopardize the interests of the country will be referred for re-negotiation or alternatively be expunged if they cannot be renegotiated.

Whilst the review of contracts can bring about great apprehension to existing companies, it should be viewed by the industry as an opportunity to address and level issues that currently poses serious political and social risk to business interest.

As discussed above, tensions have been steadily been rising over socio-economic issues in the mining sector.

Thus, while there is sound international jurisprudence for insulation against material variations that fundamentally alter the rights and obligations within contracts, it is not prudent to refuse good faith re-negotiations because it merely escalates political, social and economic risk to commercial interest.

It is important for governments not to wield such powers in a manner that undermines the stability of the sector.

Such powers should not become a tool of selective application and opportunism by governments, any issue that requires re-negotiation must be executed in according to the principals of fairness, certainty, uniformity and with the good faith.

The ethos behind the power should be to reorganize the industry for long term viability and not for short term revenue opportunities. Indeed, this is where most states have failed, the mining sector has in some instances been utilized to answer short to medium terms problems.

This has weakened the ability of governments to provide stable and certain environments because the regulatory framework is constantly changing in response to commodity prices and immediate fiscal pressures.

It is important for any mineral resource regulatory framework to visualize and define the industry in terms of the nations long term goals, this will produce a stable foundation that can adequately balance current and future needs and cater for commercial stability.

The position taken by Tanzania to allow the disclosure of mineral resources contracts is an important first step in avoiding the sadly common fate and damaging history of bad deals in mineral rich countries. It promotes accountability and reinforces governance mechanisms that are inclusive.

Encouraging the proactive participation of Parliament presents the strongest surety in ensuring that public interest is effectively defined and represented in the running of the mining sector.

This does not mean that other initiatives for accountability are less important, these should promoted and continue to be entrenched with the backing of public and private resources.

However, giving an additional arm of the state the space to oversee the mandate over mineral resources widens the pool of ideas that influences the sector and ensures that the primary duty of prioritizing national interest is achieved.