Foreign mining companies told to disclose their gross revenues
Fluorspar mining by Kenya Fluorspar Company in Elgeyo-Marakwet County. The company stopped extraction in April this year citing tough economic times. PHOTO FILE | NATION
Mining companies registered in Britain, the European Union and Canada now have to disclose the monies paid to governments in their respective jurisdictions.
These transparency regulations are meant to enable citizens of the countries they operate in to understand the contracts signed with their host governments, unlike in the past when most deals were shrouded in secrecy and confidentiality clauses.
Tanzania is the only member of East African Community that has subscribed to EITI. Ethiopia, Malawi, Mozambique, Seychelles and Zambia are in the process of implementing the voluntary initiative.
Mining companies registered in Britain, the European Union and Canada now have to disclose the monies paid to governments in their respective jurisdictions.
These transparency regulations are meant to enable citizens of the countries they operate in to understand the contracts signed with their host governments, unlike in the past when most deals were shrouded in secrecy and confidentiality clauses.
The regulations aim to deter the firms from engaging in corrupt activities overseas like underdeclaring resources that they extract so that citizens of host countries benefit from minerals discovered in their lands.
“With more than 1,200 Canada-listed extractive companies operating in over 100 countries, disclosure of payments will increase transparency of extractive sector globally,” said Publish What You Pay (PWYP-Canada) director Claire Woodside.
Ms Woodside said public disclosure of reports detailing payments to governments by the extractive companies will provide information in a systematic way.
The Dodd Frank Act required US companies to disclose taxes and royalties and broken the devastating cycle of corruption was repealed earlier this year by a President Donald Trump executive order.
Standard and Mutual, a mining consulting firm based in Nairobi, said it is still too early to determine the full impact of the repeal as a number of firms are obliged by legislation to report their revenues while other countries rely on voluntary initiatives.
Voluntary initiatives include PWYP-Canada and the Extractives Industry Transparency Initiative (EITI) based in Oslo, Norway, which seeks disclosure of information about governance in the extractives sector so as to reduce instability in resource-rich countries.
Amnesty International, a lobby group, said the mining industry often faces accusations of human-rights abuses while extracting mineral resources, as well as contamination of land, water and air affecting health of people and animals.
“Local people are often excluded from economic benefits. In many cases, corporations operate without providing key information while governments fail to provide laws for people to hold firms accountable,” Amnesty added.
East Africa has deposits of gold, copper, soda ash, coal and gemstones, being extracted by licensed firms.
Tanzania is the only member of East African Community that has subscribed to EITI. Ethiopia, Malawi, Mozambique, Seychelles and Zambia are in the process of implementing the voluntary initiative.
There are discussions to implement the same in Kenya and Uganda. The EAC can benefit by making informed decisions on how resources from oil, gas and mining should be managed as EITI covers the legal framework, contracts, licences, production, revenue collection and allocation of state budgets to enhance the sector.
Gold and diamonds illegally mined in Africa have fuelled conflict in some countries. The precious minerals have found their way into the global supply chain with armed groups using force to seize or control mining sites.
Sierra Leone, Liberia, Angola, Republic of Congo, Côte d’Ivoire, Central African Republic and Democratic Republic of Congo have human-rights abuses of by groups fighting to control diamonds.
Brilliant Earth, a lobby advocating an end to “blood” or “conflict” diamonds said the sparkling stones have not only led to civil wars, violence, worker exploitation, environmental degradation and mining inhumane settings.
