Salma Maoulidi looks at the mining research report, "A Golden Opportunity? How Tanzania is failing to benefit from Gold Mining” and argues that it builds a powerful case for continued activism in trade and economic justice in line with various Human rights instruments that call for a country’s wealth and natural resources to benefit primarily local communities.
Following intense scrutiny over suspect investment contracts by the government and investment companies, a consortium of activist organization and religious communities launched in Dar es Salaam a research titled “A Golden Opportunity? How Tanzania is failing to benefit from Gold Mining”. The report is authored by Tundu Lissu, a lawyer and long time environmental activist from Tanzania and Mark Curtis and independent author and journalist affiliated to a number of academic institutions in Europe.
The research in a critical policy area is a product of a year long initiative by activists and religious leaders to add moral weight to the mining tragedy that looms in Tanzania. Various human rights violations have been recorded including killings and displacements mainly resulting from conflicts between small miners and large scale multinational miners over mining rights. “It is not just about the mining companies but also highlighting the role of rich governments who remain silent over this injustice and in some instances have invested heavily in these companies reaping the benefits from an immoral tax structure”, says Fredrik Glad Jernes, Norwegian Church Aid Tanzania Country Representative.
The report makes grim reading about the governance and practice of mining companies in Tanzania. Mining is the fastest growing sector in the Tanzanian economy but the growth of the sector is not comparable to its contribution to the GDP at just about 3%. Part of the problem lays in the structure of the tax laws that is overly favourably to mining companies and not to Tanzanians.
The situation is attributed to the World Bank financed sectoral reform project begun in the mid nineties which became the basis of laws that inform the tax and mining regimes in the country. The royalty paid to the Government for gold is only at 3%. Tanzania posses around 45m ounces of gold which at the current gold prices means the country is worth USD39 billiion yet it is categorized as one of the poorest countries in the world. In the last 5 years Tanzania exported gold worth more than USD2.5 billion but whereas the government has only received an average of USD21.7million in royalties and taxes on the exports Mining Companies record handsome profits out side of Tanzanian on their websites and company audits presented to shareholders.
Two main companies were scrutinized on the basis of activist work done by the Lawyers Environmental Action Team headed by Tundu Lissu- Barrick Gold a Canadian Company operating mines in Bulyanhulu, North Mara and Tulakawa and AngloGold Ashanti a South African company with British links which operates mines in Geita, the largest gold deposit in the country. The researchers estimate that mining companies have earned about USD2.5 billions from exports but Tanzania only records about USD100 million from gold earnings. The researchers estimate that Tanzanian is loosing more than USD400 billion from tax concessions as well as tax evasion e.g. non payment of corporation tax and waivers on income tax on expatriate workers.
The impunity reigns in part because there is no parliamentary scrutiny over mining contracts. Also the government does not have the capacity to adequately monitor the sector. For example, there are wide discrepancies between statistics published by the companies and those issued by the government pertaining to the sector suggesting discrepancies in record keeping. In some instances the researchers have found under reporting of earning to local governments but the tendencies to inflate the amounts of investments made. Rarely is there an indication of the environmental hazards committed and likely to be committed from mining operations. In addition the investments to local communities are negligible with companies being obliged to contribute not more than USD200, 000 to local governments.
The research is published by the Christian Council of Tanzania (CCT) the National Council of Muslims in Tanzania (BAKWATA) and the Tanzania Episcopal Conference (TEC). It was funded by the Norwegian Church Aid and Christian Aid, the latter having done similar research in Zambia looking at the Copper Sector leading to the Zambian government declaring its intention to review the terms of investment contracts governing its mining sector. This is the first time the religious community in Tanzania have been involved in high profile advocacy against the government and multinationals.
The Bomani Commission, a presidential commission created to investigate the mining sector is expected to publish its findings by the end of March. “The report will provide us with sound reference on some of the recommendations” declared Hon. Zitto Kabwe who attended the launch. The Commission was constituted following the call in parliament by opposition member Zitto Kabwe for a probe committee into the suspect dealing of the Ministry with regards to Buzwagi Mine where Barrick Gold plans to open another mine in the midst of a review process of the mining sector. This triggering uproar from civil society organizations and opposition parties creating the impetus that ultimately saw the former Prime Minister Edward Lowassa resigning and his cabinet being dissolved a few weeks ago.
While the report can be criticized for lacking a gender analysis, and narratives (not just descriptions) of how mining operations are devastating lives in local communities where mining operations take place, it provides a powerful reading. It also builds a powerful case for continued activism in trade and economic justice in line with various Human rights instruments that call for a country’s wealth and natural resources to benefit primarily local communities.
* Salma Maoulidi is an Activist/Executive Director of the Sahiba Sisters Foundation in Dar es Salaam, Tanzania.
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