Factoring in governance is not enough. Mining codes in Africa, policy reform and corporate responsibility

Abstract

One of the main hypotheses underlying much of the discussion and certain of the recommendations made by the World Bank Group's Extractive Industries Review suggests that the quality of governance of a country is a key determinant for the development outcomes of extractive industries activities. While undoubtedly of central importance, a recent comparative study of mining codes in Africa suggests that while the quality of national governance is undoubtedly a key ingredient, no amount of local governance is sufficient if not accompanied by legal and fiscal frameworks designed to meet development objectives and which are implemented in the context of good international policies and rules. Based on this study, the article suggests that the reform measures introduced largely at the recommendation of multilateral financial institutions over the last twenty years have entailed a redefinition of the role of the state that is so profound that it has no historical precedent and that this situation has not received the attention which it deserves. The comparative study of what are identified as three generations of African mining codes concludes that past reforms have the potential effect of driving down standards in areas of critical importance for social and economic development, as well as in protection of the environment in the countries concerned.

Keywords:

• mining codes
• governance
• Africa
• development
• World Bank
• corporate responsibility

Notes

Thomas J. Biersteker, “Reducing the Role of the State in the Economy: A Conceptual Exploration of I.M.F. and World Bank Prescriptions”, in International Studies Quarterly, Vol.34, 1990.

To summarise briefly, Biersteker suggests that the effect of World Bank and IMF programs has been to:• increase or at least maintain state efforts to influence the economy;• state attempts to regulate the economy tend either to be reduced or to be redirected;• managing demand by imposing wage restraints or eliminating indexation programs entails a redirection of state mediation, not its reduction;• most, though not all policy reforms recommended entail a reduction of state attempts to distribute (or redistribute) the social or private product of capital;• policy reforms nearly always entail a reduction in the state's efforts to produce goods and services directly.Finally, although most of the recommended policy measures are not specifically directed against the planning function, as they leave more and more of the economy to the market, they should in fact reduce state efforts to plan economic activity. (pages 486‐8).

Hakim Ben Hammouda, L'économie politique du post‐ajustement, Karthala, Paris, 1999, p. 53.

CNUCED, Rapport sur le commerce et le développement, 1993, Geneva, 1993.

United Nations Conference on Trade and Development, “State Participation and Privatization in the Minerals Sector”. Report by UNCTAD Secretariat. TD/B/CN.1/GE.2/2.30/August/1995. P.4.

The case study of Ghana was produced by Thomas Akabzaa, Department of Geology, University of Accra, Legon.

Thomas M. Akabzaa, Boom and Dislocation. The Environmental and Social Impacts of Mining in the Wassa West District of Ghana, Third World Network, Africa, 2000, Chapter 2, pp. 17‐19.

Ibid., pp.17–18.

« According to the statutes the royalty payable ranges between 3–12 %, according to the operating margin of the mine. But in practical terms no mine pays more than 3 % », Ibid., p. 30.

Minerals and Mining Law, 1986, (PNDCL), p. 153. Ibid., p. 30.

Peter Fox, William T. Omorato et John Strongman. The World Bank Group. Assistance for Mineral Sector Development and Reform in Member Countries, Washington D.C., The World Bank, 1998.

World Bank, Technical Paper No. 18, African Technical Department, 1992. Quoted by Patricia Feeney, “The Human Rights Implications of Zambia's Privatisation Programme” in Micheal K. Addo (ed.) Human Rights Standards and the Responsibility of Transnational Corporations, Kluwer Law International, Great Britain, 1999, pp.323–350.

Ibid., p. v

World Bank, Strategy for African Mining, Mining Unit, Industry and Energy, World Bank Technical Paper Number 181, Africa Technical Department Series, 1992, Washington, p.18.

Ibid. p 47.

Ibid., p. 53.

Thomas M. Akabzaa, Boom and Dislocation. The Environmental and Social Impacts of Mining in the Wassa West Distinct of Ghana, Third World Network, Africa, 2000.

Craig Emerson, Mining Enclaves and Taxation. World Development Vol 10. No. 7, 1982, pp 561–571.

Kathleen Andersen, “Mining, privatization and the environment” in Journal of Mineral Policy, Business and Environment, Raw Materials Report, (Stockholm), vol.11, no.3, 1995, p.27.

Article 16 « Protection de l'environnement » reads: « Les opérations minières ou de carrières doivent être conduites de manière à assurer la protection de l'environnement conformément au Code de l'Environnement. Les entreprises doivent prendre les mesures nécessaires à la prévention de la pollution de l'environnement, aux traitements des déchets, émanations et effluents, et à la préservation du patrimoine forestier et des ressources en eau. »

Bonnie Campbell, “Environmental Policies, Mining and Structural Adjustment in Guinea”, Journal of Mineral Policy, Business and Environment. Raw Materials Report, published by Raw Materials Group, Stockholm, vol.13, no.1, April 1998.

République de Guinée, Plan National d'Action pour l' Environnement, PNUD/UNSO/GUI/90/X20, Parc Scientifique Agropolis, Montpellier, September 1994, p. 22.

Geneviève Nolet, Envirobref, Institut des Sciences de l'Environnement, Université du Québec à Montréal, February‐March 2001.

Soulemayne Dembele, “Environnement au Mali. ONG: Partenaires ou Prestataires de services?” In Info‐CCA, Bulletin de liaison du Comité de Coordination des Actions des ONG au Mali, no.152, Bamako, September 2000.

Claudie Gosselin and Touré Bani, “Cohérence des politiques et interventions canadiennes dans la lutte contre la pauvreté: Le cas du Mali”, The North‐South Institute, Ottawa, November 2000,

Bruno Sarrasin, Élaboration et mise en œuvre du Plan d'action environnemental à Madagascar (1987–2001): construction et problèmes d'une politique publique. Doctoral dissertation in Political Science, Université de Paris 1, 2002

WORLD BANK, Project Appraisal Document for a Mining Sector Reform Project, Report No 17788‐MAG, Washington, D.C., June 2, 1998, p. 6.

World Trade Organization, Trade Policy Review of Tanzania, (Geneva: WTO, 2000), p. 55.

Ibid.

Ibid., p.14.

Van der Veen, Peter, “The World Bank Experience. Lessons From 10 Years of Mining Sector Reform: The Road Traveled”, Mining Taxation Workshop, Mining Department, Washington D.C., April 4–5, 2000

Koh Naito, Felix Remy and John P, Williams, Review of Legal and Fiscal Frameworks for Exploration and Mining, produced for the World Bank, Mining Journal Books, London, 2001, vol 1, p.6.

Ibid.

Michael Knuckey, “Noranda Mining and Exploration: A New World, A New Direction” paper presented to the Prospectors and Developers Association of Canada (PDAC) and the Canadian Institute of Mining and Metallurgy, Toronto Branch, March 13, 1996. See www.noranda.com. Quoted in The North‐South Institute, Canadian Corporate and Social Responsibility, Canadian Development Report 1998, Chapter 4, “Beyond Best Practice. The Mining Sector”, p.75.

World Bank, « A Mining Strategy for Latin America and the Caribbean: Executive Summary » World Bank Technical Paper, no 345, Industry and Energy Department, 1996, p. 3 (http//www.worldbank.org). Quoted in Canadian Corporate and Social Responsibility, op.cit., p.78.

Ibid., pp.77–78.

Ibid., p.80.