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New Mines Act: Commendable But Flawed

New Mines Act: Commendable But Flawed

I am a tad disappointment with the rushed process of approving the Mines and Minerals Act. It would appear that the Government wanted to have an Act in place in time for the Investment Conference in London. It would seem particularly strange to rush through an Act that has been in the works since 2004 when it still has some glaring laws that could easily be rectified.

This is not a new Bill and both the erstwhile SLPP Government and the present Government can justifiably claim credit for it. The Bill is largely derived from the Draft Consolidated Mines and Minerals Bill, which had been completed by the Law Reform Commission by 2007 and later handed over to the new APC Government. This work started in 2001 with support from Dfid and addressed key areas including investment, health, safety, environmental and social development issues that were not well handled in the 1994 Mines and Minerals Act.

It is heartening to note that after initially neglecting this work, the Government later decided to adapt it to form the present Bill. It is worth noting that the process of consultation for this adaptation has not been as wide as for the Draft Bill by the Law Reform Commission, which had carried out nationwide consultations and commissioned expert papers on various salient issues.

The Government apparently had good intentions in adapting certain sections but quite honestly they have not done much consultation and after a few initial sensitization meetings, altered certain sections without consulting with stakeholders-civil society and the Chambers of Mines, representing the mining industry are particularly livid about this. One cannot underestimate the effect this would have on the implementation of the Act and its accompanying regulations in an industry in which social problems and schisms between various stakeholders abound. I do know that the ministry has developed myriad regulations to give effect to the Act and hope that these effectively cover thorny areas like compensation and resettlement well (This is doubtful as I am not aware of any consultations in this regard).

I cannot understand why the Government would ride roughshod over a process that could easily have been made more transparent with a view to making its implementation more acceptable. Not allowing Members of Parliament to extensively debate this Bill is in my view a mistake and will have repercussions down the line. My review as a practitioner in the mining policy field is that it is a good document which is a major improvement in the 1994 Act as it addresses many more areas, as already indicated and areas dealing with transparency in the sector. There are many glaring flaws however, which, though not major and catastrophic may lead to problems down the line. Also there are a few issues dealing with socio-economic development in mining areas that could have been debated some more, especially to get the views of MPs from mining areas, considering the flaws in the consultation process. My review indicates that a considerable amount of discretionary powers have been granted the ministry without ensuring that checks and balances are put in place to ensure these powers are not misused.

The composition of the Minerals Advisory Board is also flawed. It has representatives from the major MDAs allied to the mining industry but not from the Ministry of Agriculture and Forestry and the Environmental Protection Agency. This is going to cause problems down the line with land use decisions and decisions influenced by environmental and social considerations. There are sections on compensation for disturbance of land and right of resettlement but these just rehash what is in the 1994 Act.

If these are not accompanied by clearly thought out and defined regulations, two of the biggest problems in the mining industry will not be well addressed. Compensation procedures and payment levels would need to be considered in such regulations and there needs to be a new unambiguous framework for resettlement.

Currently, resettlement rules are unclear and left to the whims of various stakeholders. The Act eludes to the payment of financial Sureties for the rehabilitation of mined out land and for environment damages in general-a-good thing. The same requirements are also stipulated in the Environmental Protection Act, 2008 under the purview of the Environmental Protection Agency. This is clearly duplication and should be rectified. More fundamentally, the Bill makes reference to the Environmental Protection Act, 2000 in many places, totally oblivious of the fact that this Act has been repealed and replaced by the Environmental Protection Act 2008. This is ridiculous. (Incidentally the EPA 2008 was also rushed and one and a half years after its adoption, the Agency has not been set up and staffed). Despite all the rhetoric about getting more for people in mining communities, I find the Bill a bit weak in this area of socio-economic development.

I had particularly wanted the MPs to discuss the requirement for companies to pay 0.1% of turnover for Community Development. Some may have considered this too small and pushed for an increase. An annual turnover of $100m will only yield $100,000. I also would have preferred a debate on allocation of royalty payment to Government as some stakeholders may have preferred allocation of a certain percentage of this to mining communities as is done in Ghana and many other countries. There are lot more glaring technical problems that I have not mentioned here.

The Act is also silent on many issues that the Government has been brandishing and this is a surprise. There is no reference to a National Minerals Agency that the Government has said it was going to set up and no reference to a new Core Minerals Policy that it says it has developed.

In the final analysis, whatever the merits of a new Act, the fundamental problems of the mining industry still persist and need to be addressed. To date the mining review process started by Government has not concluded a single agreement after two years. The protracted process is sending mixed signals to the investors. More importantly the inadequacy of the institutions that administer, regulate and monitor the minerals industry in Sierra Leone in cause for concern. There is a great need to develop and strengthen human resources, institutions and governance in the sector.

By rushing the Act, the Government has clearly clutched defeat from the jaws of victory-it was indeed commendable that they had been working on this Act. All is now water under the bridges as the Act has been passed. The government should however be aware of these shortcomings and try to remedy the situation. Some fence mending with stakeholders is certainly called for. I know those of us in the technical support area will be ready to provide such support if required. The Mining Industry is much too important to this economy to be embroiled in political gamesmanship from whatever quarter.

By Andrew Keili

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