Mining codes in Africa: emergence of a ‘fourth’ generation?

Abstract

A burgeoning interest among academics, policy-makers and civil society groups has developed concerning Africa's extractive sector and particularly its mining codes, which are now at the centre of a wider policy debate over natural resource governance and economic development on the continent. This article reviews the evolution of Africa's regulatory codes in the mining sector, which has undergone what Bonnie Campbell describes as ‘three generations’ of liberalization since the 1980s. We also highlight new voluntary, regional and transnational initiatives, driven by a host of heterogeneous actors from Africa and abroad, which constitute a ‘fourth’ generation of mining codes and natural resource governance practices that place primary emphasis on transparency and accountability by both mining companies and host governments. This new generation of natural resource governance initiatives presents new opportunities as well as unique challenges, particularly with the growing role of emerging economies such as the BRICS (Brazil, Russia, India, China and South Africa). We conclude by assessing future trends and policy challenges in Africa's extractive sector governance.

Notes

¹ This is the term coined by John Williamson, referring to the neoliberal economic policy adjustments advocated from the 1980s on by international financial institutions (IFIs) and many Western development donors. These included fiscal restraint, reduced public expenditures, low taxation rates, liberalized interest rates, competitive exchange rates, trade liberalization, liberalized rules for FDI, privatization, deregulation and strengthened property rights (Williamson 2004).

² In Guinea, for example, the new mining code entitles the State to an overall share-holding of up to 35 per cent.

³ The Act extends extraterritorial jurisdiction to prosecute bribery committed abroad by persons resident in the UK as well as UK nationals and corporate bodies, < http://www.legislation.gov.uk/ukpga/2010/23/notes/division/2>.

⁴ This legislation compels American companies to disclose the use or sourcing of ‘conflict minerals’ from the DRC and adjacent states, the source of certain listed metals, as well as the payments made to governments for commercial exploration of oil, gas and mineral resource development (De Backer 2012).

⁵ These initiatives set forth a series of principles to which member companies are expected to adhere. These include guidelines such as ‘adhering to ethnical business practices and sound systems of corporate governance’, ‘upholding fundamental human rights’, ‘seeking continual improvement of health and environmental performance’, ‘contributing to conservation and land use planning’ and ‘contributing to the social, economic and institutional development of the communities’ where they operate (International Council on Mining and Metals 2012). Other examples of industry-initiated codes include the Canadian Prospectors and Developers Association's ‘Environmental excellence in exploration’ initiative and the Australian Minerals Industry framework for CSR, called ‘Enduring value’ (Coumans 2010, 31).

⁶ EITI, launched in September 2002 at the World Summit on Sustainable Development in Johannesburg, South Africa, is marketed as a mechanism for ‘facilitating prudent management of mineral payments through the verification and full publication of company payments and government revenues from oil, gas and mining’ (Hilson and Maconachie 2009, 53).

⁷ A voluntary code of conduct initiated by US and UK governments concerning security and human rights in the extractive sector, focused on risk assessment, relations with public security and relations with private security.

⁸ The Natural Resource Charter was drafted by a group of 30 international experts, including Paul Collier, Director of the Centre for the Study of African Economies at Oxford University; Karin Lissakers, Director of Revenue Watch Institute; and Tony Venables, Director of OxCarre at Oxford University. The Charter provides 12 voluntary ‘Precepts’ that are meant to inform and guide natural resource management for resource-rich developing countries.

⁹ A framework that defines client roles and responsibilities for managing projects and requirements for IFC support, including the need to disclose financial and human rights related information. The Equator Principles emerged as a derivative of the IFC Performance Standards, and have been adopted by over 60 financial institutions.

¹⁰ The Kimberly Process—an initiative to stem the flow of conflict diamonds through a certification and sanctioning scheme—has received increased criticism following the withdrawal of Global Witness from the organization. The UN Global Compact, similar to the voluntary initiatives within industry and governments, provides a list of ten ‘universally accepted principles’ in the areas of human rights, labour, environment and anticorruption to ameliorate the business practices of corporate actors operating internationally.

¹¹ Diamonds from the Marange diamond fields in Zimbabwe, for example, were banned from international sale by the Kimberley Process in 2009 following allegations that diamond revenues were funding the operations of Zanu-PF and that human rights abuses at the mines were rampant.

¹² The Office was created in 2009 as part of the Government of Canada's CSR strategy for the Canadian extractive sector operating overseas, mandated to review the CSR practices of Canadian companies and advise stake-holders on the implementation of performance standards (Department of Foreign Affairs and International Trade 2011).

¹³ Passed into US law in 2010, the conflict minerals section of the Dodd-Frank Act is directed at companies engaging in economic activities in which conflict minerals are ‘necessary to the functionality or production’ or their manufacturers, including tin, tantalum, tungsten and gold originating from the DRC and surrounding countries. To be compliant, a company must publish a ‘Conflict Minerals Report’ that affirms whether its conflict minerals are ‘DRC conflict-free’ and provide evidence supporting this conclusion (Brookings Institute 2011).

Additional information

Notes on contributors

Hany Besada

Hany Besada is a United Nations Research Specialist for the Secretariat of the High Level Panel on the Post 2015 Development Agenda. He is also a Theme Leader for Governance of Natural Resources at the North-South Institute (NSI) and Adjunct Research Professor at Carleton University in Ottawa, Canada. He is a Project Investigator, National Priority Research Program, funded by Qatar National Reserch Fund, ID#6-1272-5-160. His edited publications include Multilateral development cooperation in a changing global order (Palgrave, 2013), Moving health sovereignty: global challenge, African perspective (Ashgate, forthcoming 2013), Zimbabwe: picking up the pieces (Palgrave, 2011) and Crafting an African Security architecture: addressing regional peace and conflict in the 21st century (Ashgate, 2010). He is currently pursuing a PhD in Politics and International Studies at University of Warwick in the United Kingdom. Email: [email protected].

Philip Martin

Philip Martin is a PhD student in Political Science (International Relations and Security Studies) at the Massachusetts Institute of Technology. He has previously worked for the United Nations Development Programme, the Canadian Department of Foreign Affairs and International Trade, the North-South Institute, Mines Action Canada and Norwegian People's Aid. He is the author of, most recently, ‘Coming together: power-sharing and the durability of negotiated peace settlements’ (forthcoming in Civil Wars). Email: [email protected].