Monthly Archives: March 2015

Canada: John Baird’s appointment to Barrick job raises questions

Former foreign minister also up for big job at Canadian Pacific.

Former Conservative cabinet minister John Baird has been hired as an international adviser by Toronto-based Barrick Gold Corp.

Adrian Wyld / THE CANADIAN PRESS file photo

Former Conservative cabinet minister John Baird has been hired as an international adviser by Toronto-based Barrick Gold Corp.

OTTAWA—John Baird’s appointment to a high-level job at a global mining giant that lobbied him when he was foreign affairs minister is raising questions about the rules governing employment for former public office holders.

Baird, who announced last month that he was stepping down from Prime Minister Stephen Harper’s cabinet and leaving politics, has been hired as an international adviser by Toronto-based Barrick Gold Corp.

While Baird was in charge of foreign affairs, Barrick sent a lobbyist to discuss international relations, mining and trade with him several times — most recently in May 2013. Barrick, the world’s leading gold company, has extensive mining operations in the Americas and South Pacific.

“What’s disturbing here is we’re seeing this revolving door between very key industries and the cabinet,” said NDP ethics critic Charlie Angus. “And the lobbying act doesn’t cover this kind of movement because people are being hired as advisers, not lobbyists.”

But people like Baird are not hired to explain industry positions to the government as a lobbyist would do, Angus said. “You hire John Baird because he knows people in government; you hire him to make the call if you need that.” But government, he said, is not supposed to be about “who you know in the PMO (Prime Minister’s Office).”

Maude Barlow, national chairperson of the Council of Canadians, said Barrick stands to be helped by the Harper government’s promotion of mining and other international economic activity. “This appointment raises serious ethical questions that must be answered by this government,” she said.

Baird has also been nominated to join the board of directors of Canadian Pacific, he confirmed Monday. The job pays $235,000 annually.

Baird could not be reached for comment but tweeted: “I consulted the Ethics Commissioner before joining Barrick and before accepting CP’s invitation to serve on their Board. Got the green light.”

A spokesperson for Mary Dawson, the federal ethics watchdog, confirmed Baird had “consulted the commissioner with respect to his post-employment obligations.” Under conflict-of-interest rules, which Baird helped guide into law, former cabinet ministers cannot take employment with a company with which they have had “significant” dealings during the year before they left office.

SOURCE: http://www.thestar.com/news/canada/2015/03/30/john-bairds-appointment-to-barrick-job-raises-questions.html

Afghanistan’s Economic Recovery: A New Horizon for South-South Partnerships?

By Kanya D’Almeida

The Asian Development Bank (ADB) has invested 1.2 billion dollars in Afghanistan for roads, railways, and airport projects. Credit: Giuliano Battiston/IPS

The Asian Development Bank (ADB) has invested 1.2 billion dollars in Afghanistan for roads, railways, and airport projects. Credit: Giuliano Battiston/IPS

UNITED NATIONS, Mar 27 2015 (IPS) – First the centre of the silk route, then the epicenter of bloody conflicts, Afghanistan’s history can be charted through many diverse chapters, the most recent of which opened with the election of President Ashraf Ghani in September 2014.

Having inherited a country pockmarked with the scars of over a decade of occupation by U.S. troops – including one million unemployed youth and a flourishing opium trade – the former finance minister has entered the ring at a low point for his country.

“Our goal is to become a transit country for transport, power transmissions, gas pipelines and fiber optics.” — Ashraf Ghani, president of Afghanistan

Afghanistan ranks near the bottom of Transparency International’s most recent Corruption Perceptions Index (CPI), tailed only by North Korea, Somalia and Sudan.

A full 36 percent of its population of 30.5 million people lives in poverty, while spillover pressures from war-torn neighbours like Pakistan threaten to plunge this land-locked nation back into the throes of religious extremism.

But under this sheen of distress, the seeds of Afghanistan’s future are slumbering: vast metal and mineral deposits, ample water resources and huge tracts of farmland have investors casting keen eyes from all directions.

Citing an internal Pentagon memo in 2010, the New York Times referred to Afghanistan as the “Saudi Arabia of Lithium”, an essential ingredient in the production of batteries and related goods.

The country is poised to become the world’s largest producer of copper and iron in the next decade. According to some estimates, untapped mineral reserves could amount to about a trillion dollars.

Perhaps more importantly Afghanistan’s landmass represents prime geopolitical real estate, acting as the gateway between Asia and Europe. As the government begins the slow process of re-building a nation from the scraps of war, it is looking first and foremost to its immediate neighbours, for the hand of friendship and mutual economic benefit.

Regional integration 

Speaking of his development plans at the New York-based Council on Foreign Relations (CFR) Thursday, Ghani emphasised the role that the Caucasus, as well as Pakistan and China, can play in the country’s transformation.

“In the next 25 years, Asia is going to become the world’s largest continental economy,” Ghani stressed. “What happened in the U.S. in 1869 when the continental railroad was integrated is very likely to happen in Asia in the next 25 years. Without Afghanistan, Central Asia, South Asia, East Asia and West Asia will not be connected.

Ghani added that the bulk of what Afghanistan hopes to produce in the coming decade would be heavy stuff, requiring a robust rail network in order to create economies of scale.

“In three years, we hope to be reaching Europe within five days. So the Caspian is really becoming central to our economy […] In three years, we could have 70 percent of our imports and exports via the Caspian,” he claimed.

Roads, too, will be vital to the country’s revival, and here the Asian Development Bank (ADB) has already begun laying the groundwork. Just last month the financial institution and the Afghan government signed grant agreements worth 130 million dollars, “[To] finance a new road link that will open up an east-west trade corridor with Tajikistan and beyond.”

Thomas Panella, ADB’s country director for Afghanistan, told IPS, “ADB-funded projects in transport and energy infrastructure promote regional economic cooperation through increased connectivity. To date under the Central Asia Regional Economic Cooperation (CAREC) programme, 2.6 billion dollars have been invested in transport, trade, and energy projects, of which 15 are ongoing and 10 have been completed.

“In the transport sector,” he added, “six projects are ongoing and eight projects have been completed, including the 75-km railway project connecting Hairatan bordering Uzbekistan and Mazar-e-Sharif of Afghanistan.”

Afghanistan’s transport sector accounted for 22 percent of the nation’s gross domestic product (GDP) during the U.S. occupation, a contribution driven primarily by the presence of foreign troops.

Now the sector has slumped, but financial assistance from the likes of the ADB is likely to set it back on track. At last count, on Dec. 31, 2013, the development bank had sunk 1.9 billion dollars into efforts to construct or upgrade some 1,500 km of regional and national roads, and a further 31 million to revamp four regional airports in Afghanistan, which have since seen a two-fold increase in usage.

In total, the ADB has approved 3.9 billion dollars in loans, grants, and technical assistance for Afghanistan since 2002. Panella also said the bank allocated 335.18 million dollars in Asian Development Fund (ADF) resources to Afghanistan for 2014, and 167.59 million dollars annually for 2015 and 2016.

China too has stepped up to the plate – having already acquired a stake in one of the country’s most critical copper mines and invested in the oil sector – promising 330 million dollars in aid and grants, which Ghani said he intends to use exclusively to beef up infrastructure and “improve feasibility.”

Both India and China, the former through private companies and the latter through state-owned corporations, have made “significant” contributions to the fledgling economy, Ghani said, adding that the Gulf states and Azerbaijan also form part of the ‘consortium approach’ that he has adopted as Afghanistan’s roadmap out of the doldrums.

‘A very neoliberal idea’

But in an environment that until very recently could only be described as a war economy, with a poor track record of sharing wealth equally – be it aid, or private contracts – the road through the forest of extractive initiatives and mega-infrastructure projects promises to be a bumpy one.

According to Anand Gopal, an expert on Afghan politics and award-winning author of ‘No Good Men Among the Living’, “There is a widespread notion that only a very powerful fraction of the local elite and international community benefitted from the [flow] of foreign aid.”

“If you go to look at schools,” he told IPS, “or into clinics that were funded by the international community, you can see these institutions are in a state of disrepair, you can see that local warlords have taken a cut, have even been empowered by this aid, which helped them build a base of support.”

Although the aid flow has now dried up, the system that allowed it to be siphoned off to line the pockets of strongmen and political elites will not be easily dismantled.

“The mindset here is not oriented towards communities, it’s oriented towards development of private industries and private contractors,” Gopal stated.

“When you have a state that is unable to raise its own revenue and is utterly reliant on foreign aid to make these projects viable […] the straightforward thing to do would be to nationalise natural resources and use them as a base of revenue to develop the economy, the expertise of local communities and the endogenous ability of the Afghan state to survive.”

Instead what happens is that this tremendous potential falls off into hands of contracts to the Chinese and others. “It’s a very neoliberal idea,” he added, “to privatise everything and hope that the benefits will trickle down.

“But as we’ve seen all over the world, it doesn’t trickle down. In fact, the people who are supposed to be helped aren’t the ones to get help and a lot of other people get enriched in the process.”

Indeed, attempts to stimulate growth and close the wealth gap by pouring money into the extractives sector or large-scale development – particularly in formerly conflict-ridden countries – has had disastrous consequences worldwide, from Papua New Guinea, to Colombia, to Chad.

Rather than reducing poverty and empowering local communities, mining and infrastructure projects have impoverished indigenous people, fueled gender-based violence, and paved the way for the concentration of wealth in fewer and fewer hands.

A far more meaningful approach, Gopal suggested, would be to directly fund local communities in ways that don’t immediately give rise to an army of middlemen.

It remains to be seen how the country’s plans to shake off the cloak of foreign occupation and decades of instability will unfold. But it is clear that Afghanistan is fast becoming the new playground – and possibly the next battleground – of emerging players in the global economy.

Edited by Kitty Stapp

SOURCE: http://www.ipsnews.net/2015/03/afghanistans-economic-recovery-a-new-horizon-for-south-south-partnerships/

Kenya: Balala wants uniform mining laws for Africa

By Nation Correspondent
27th March 2015

Mining Cabinet Secretary Najib Balala has asked African countries to formulate uniform mining laws to prevent exploitation.

This, he said, would solve the problem of the “resource curse” that is common on the continent, where locals remain poor despite the wealth being extracted from their lands.

Diverse regulations

Speaking during the 17th Biennial Ambassadors and High Commissioners conference at Leisure Lodge Resort in Diani, Kwale, yesterday, Mr Balala said diverse regulations were giving investors the upper hand.

“We have the same companies in Kenya, Tanzania or Ghana. Therefore, we must make our laws and fiscal regime uniform for the benefit of our people,” he said.

Mr Balala asked African leaders to put the interests of their people first by refraining from looting resources.

The minister urged mining companies to maintain high levels of transparency on payments made to the governments.

Make it transparent

“If you want declarations then let us make everything transparent so that there are benefits for the people,” said Mr Balala.

At the same time, he vowed to be very strict on the licensing of mining firms.

Mr Balala defended the government’s decision to raise the amount of money paid as royalties from 0 to 12 per cent, saying it was fair.

Tanzania: UK Experts Focus On Dar Oil and Gas Industry

26 March 2015

Scottish oil and gas businesspersons and experts are in the country targeting to get local partners for investment in oil and gas manpower training and technology development.

Scottish Development International (SDI) Regional Manager for Africa, Gary Soper said in Dar es Salaam on Wednesday that the British region which is home to oil and gas industries dating back over four decades had a lot to offer to the country’s infant industry.

“We have more than 40 years experience in oil and gas sector involving skills development and technology innovations,” said Mr Soper who pointed out that the Scotts are looking for partners in vocational training, technology in safety and security, among other areas.

He said the Scottish delegation which has already visited neighbouring Mozambique is also focusing on the East African Community market.

“But Scotland has also the best universities in the world where oil and gas experts are trained,” he underlined. Senior International Business Executive from SDI, Ian Ross said Scotland has expertise to offer Tanzania in the field of offshore oil and gas exploration.

“When we started drilling in Scotland, it was almost onshore because it was in the shallow waters,” Mr Ross said. Ross noted that because the country’s oil and gas extraction is being done offshore Scottish expertise and businesses can play a role saying emphasis will be put on training human capital locally other than going to Britain.

British High Commissioner to the country, Dianna Melrose said her government is interested in helping the country develop the entire value chain and not specific portions of the oil and gas industry.

“When British investors come here, we are taking about benefiting enterprises across the value chain,” Ms Melrose noted. She pointed out that when President Jakaya Kikwete visited Britain over a year ago, he saw and admired Scottish oil and gas industry which he invited to Dar es Salaam for possible investment in oil and gas industry.

“We want the UK’s strong investors with skills to come to this country to partner with local business people and training institutions,” Melrose noted.

The Scottish delegation which comprises of educational institution, oil and gas supply chain and government representatives is expected to meet local peers before leaving the country on Friday.

Scotland’s oil and gas industry total supply chain has sales worth 17 billion pounds per annum with direct international sales accounting for almost a half of the amount. One of the competitive sectors is subsea infrastructure whereby Scotland accounts for 40 percent of global sales.

SOURCE: http://allafrica.com/stories/201503261036.html

Canada: Will ‘Mining’ Watchdog Hold Multinationals to Account?

New regulator is respected, but office is toothless.

By Jeff Bone, Yesterday, TheTyee.ca

GuatemalaMine_610px.jpg

Canada’s corporate social responsibility strategy is to ensure resource companies operating abroad adhere to international human right and labour standards. Flickr photo of Guatemala mine via Goldcorp Inc.

Mining companies are unique in that they have always had to go where resources are physically located. These areas are often remote, environmentally delicate and inhabited by Indigenous people who will not share equally in the economic benefits of development.

Canadian mining companies’ international assets have increased in the past 10 years from a value of $30 billion to $210 billion. In light of these investments, some argue that the environment and communities from where these minerals are extracted have sometimes faced negative impacts. For instance, Hudbay Minerals Inc. is expected to go to trial in Ontario for alleged human rights abuses in Guatemala where it and a former subsidiary operated a nickel mine. The company has denied the allegations and they have not been proved in court.

In early March, the Canadian government appointed a new federal Corporate Social Responsibility (CSR) counsellor for the mining sector after paying $180,000 to run the vacant office for more than a year.

It is unlikely the appointment of Jeffrey Davidson, an academic at Queen’s University, reflects a shift in the government’s approach to regulating the overseas activity of the extractive sector. Simply put, nothing will change.

This is Ottawa’s second run at establishing a watchdog role over Canadian mining companies. In 2009, the federal government first unveiled its CSR strategy, which established the Office of the Extractive Sector CSR counsellor to investigate disputes raised by foreign communities that allege wrongdoing by Canadian mining companies abroad. The office is not vested with any civil or criminal powers of enforcement. The CSR counsellor cannot impose a remedy or issue any sanctions.

Left position

From 2010 to 2013, almost all of the complaints filed with the CSR counsellor ended with the corporate respondent refusing to participate in the process. Even those cases that proceeded failed to produce meaningful long-term results. The former CSR counsellor, Marketa Evans, quietly left her position in 2013. Under her mandate, none of the complainants received a remedy as a result of using the CSR counsellor. The lack of effective engagement was not the result of the CSR counsellor’s willingness to achieve meaningful outcomes, but reflective of the frail authority given to the office.

Canada’s original CSR strategy was released in part as a reaction to the near passage of a 2009 private member’s Bill C-300, brought by Liberal MP John McKay. The proposed law would have required Canadian mining companies that rely on federal support to comply with certain international human rights and environmental standards.

The World Bank and United States apply similar requirements. A similar bill sponsored by Peter Julian, an NDP MP from British Columbia, is still before Parliament. It is not expected to become law.

In late 2014, the Government of Canada built on the CSR strategy with an initiative called “economic diplomacy,” which includes advocacy efforts in foreign markets and participation in government trade missions. Under the initiative, the government encouraged multinational corporations to align with industry best practices. The government is now committed to withdrawing financial support to corporations that fail to participate in the CSR counsellor’s dispute resolution process. In addition, the government has re-focused the role of the CSR counsellor to resolve disputes in the early stages and avoid the appearance of providing long-term mediation for the parties.

On a positive note, for those seeking further accountability of corporate conduct abroad, the inclusion of economic diplomacy is a promising tool to enhance the human rights and environmental record of Canadian companies operating abroad and aligns with the original intent of the failed Bill C-300.

As a critique, the 2014 update to Canada’s CSR strategy reduces the authority of the CSR counsellor. Some commentators and organizations advocated for the counsellor’s role to be expanded into an ombudsman service with the power to order remedies and advocate on behalf of foreign communities impacted by Canadian mining operations.

The new CSR counsellor, Davidson of Queen’s, has exceptional work experience across public and private sectors, and has been involved with mining and mineral resource development for the past 35 years. As competent as Davidson may be, the government has not given him the tools necessary to be an effective regulator of the extractive sector. The proper role of the CSR counsellor deserves further study by government and industry.  [Tyee]

SOURCE: http://thetyee.ca/Opinion/2015/03/25/Mining-Watchdog-Multinational-Account/

Uganda: Tullow, Total to carry out huge job layoffs


Field tour of a rig at Kigogole oil well in Buliisa district

 

There remains a whiff of uncertainty at Total E&P Uganda and Tullow Oil Uganda as the two oil companies prepare to lay off staff at a time when the dip in global oil prices, coupled with the slow progress within Uganda’s oil industry to get to the production stage, continue to impact the revenue streams within the country’s energy industry.

According to information gathered by The Observer, the two companies have already informed some of its key staff of an impending exercise to lay off some workers. It is still unclear how and when this job downsizing will take place.

Total Uganda, according to our sources, has over the last couple of weeks gradually recalled its expatriate staff back to its head offices in Paris, with the most prominent being Francois Rafin, the former country manager, who left in January. The French major has already announced that it would not be hiring new staff this year.

STAFF DOWNSIZING

Recently, Total Uganda asked some of its staff from the field – especially those attached to the environment section – to leave although, according to our sources, that decision was rescinded.

Tullow Oil has also been undertaking its form of staff downsizing. The company cut staff a year ago, although it is not clear how many were laid off. The company had not commented by the time we went to press.

Tullow Plc has already announced that it will spend just $200m this year, an 80 per cent drop from the amount it spent a year ago. The company said it would concentrate on its West African operations.

Total Uganda says the job cuts are as a result of the close of the exploration stage, which required more staff. The company said the development stage required fewer staff numbers.

In an email to The Observer, Total said: “The completion of the exploration phase has led to a natural decrease of operations and activity, which is common for any oil and gas project during the transition from exploration to development phase and, therefore, creating a need to adapt ourselves to the pace of the project and to optimise with our partners synergies in terms of infrastructures and equipment.”

The company added that “Infrastructures are now shared between Total and its partner Tullow in Buliisa as an example of synergies that have been put in place to adapt to the situation and reduce the costs. More generally, during this transition period, Total E&P Uganda will have to continue to take into account the impact of the low expected activity while working towards development…”

To be fair, the drop in global oil prices has seen a range of expenditure cuts across many other companies. International oil prices have dropped to below $50 a barrel, half of what it traded in June last year, as a glut of crude oil meets less demand in the market place.

As a result, share prices of oil companies such as Tullow have nose-dived, while other companies have decided to cut back on their capital expenditure to ride through the storm.

Halliburton, one of the midstream companies operating in Uganda’s oil industry, recently announced it would cut thousands of jobs across its global operations.
Shell has also undertaken similar measures as it seeks to reduce its costs.

While global oil price movements are to blame for staff cuts, it is not clear what impact the slow progress within Uganda’s industry to resolve some of the key issues such as the award of production licenses, has had on the whole job lay-off exercise.

It is more than a year since Tullow and Total handed in requests for production licenses to the Uganda government. There is still no clear proof that government would issue those licenses soon.

The bone of contention appears to be around the rate of recoverable oil that oil companies are willing to work with. The government and the oil companies are yet to agree on this figure, according to our sources.

Thierry Austin, the head of Total’s operations in Uganda, and Javier Rielo, Total’s head for East Africa, both of whom are based in Paris, were recently in Uganda. It is not clear what the intention of their visit was, although there was speculation it touched on both negotiations with government over the licenses, and the direction of the company as it tries to cut down costs.

Total says more employment opportunities will be made available as the country embarks on the production stage. The early stages of the development stage, which is what Uganda is heading to, require conducting a number of studies, which usually go to a few consultants.

However, the oil companies are said to be resigned to the fact that Uganda will not produce its first barrel of oil by 2018, as the country continues to promise. While it is clear the country is behind schedule, the ministry, as early as February, still promised that oil production would be in 2018.

The oil companies, according to our sources, are likely to announce soon that Uganda can only produce first oil by 2020 at the earliest.

If this announcement comes as expected, the change of the dates will definitely change the financing arrangements within the industry. It is likely to make capital a lot more expensive for those who intend to invest in Uganda’s oil industry.

Financiers, such as banks, might be worried that committing too much capital to an industry that misses its target might be a bit risky, and would, therefore, factor in that while pricing their loans.

Uganda struck oil in 2006. The country back then said it would make it to early production by 2011. The years have since shifted to 2014, and then 2018.

jeff@observer.ug

SOURCE: http://www.observer.ug/business/38-business/36968-tullow-total-to-carry-out-huge-job-layoffs

Kenya: Cortec takes battle for mining licence to Court of Appeal

23rd March, 2015

PHOTO | FILE Cortec Kenya Limited director for Kenya Jacob Juma.

 

Cortec Kenya Limited Country Director Jacob Juma. On March 23, 2015, he took the battle for the firm’s mining licence in the Mrima Hills to the Court of Appeal. FILE PHOTO |   NATION MEDIA GROUP

By VINCENT AGOYA
More by this Author

In Summary

  • The company seeks to overturn the judgment that dismissed its case against Mr Balala for stopping its operations prematurely in Kwale County.
  • Cortec, through its Country Director Jacob Juma, claims the judgment was flawed and failed to address the core concern that “it was not given a hearing as required in law before the decision was made.”
  • He said the judge failed to address the process of striking out the licence, instead delving into areas concerning acquisition of prior consent from government oversight agencies.
  • Mr Juma has restated that the minister’s action was based on ulterior motives and not on law, and now wants the court of appeal to intervene.

A licensing dispute pitting Cabinet Secretary Najib Balala against an international mining company, Cortec Mining Kenya, is now headed for the Court of Appeal.

The company on Monday filed the appeal in which it is seeking to overturn the judgment that dismissed its case against Mr Balala for stopping its operations prematurely in Kwale County.

Mr Balala struck out Cortec’s licence after the firm claimed it had identified commercially viable mineral deposits estimated at Sh61 trillion in the Mrima Hills.

Cortec, through its Country Director Jacob Juma, claims the judgment was flawed and failed to address the core concern that “it was not given a hearing as required in law before the decision was made”.

The appellant has restated that “the minister breached Section 27 of the Mining Act by not giving them a hearing before he made the decision”.

PROTECTED HILLS

He said the judge failed to address the process of striking out the licence, instead delving into areas concerning acquisition of prior consent from government oversight agencies.

Former Commissioner of Mines L. K Biwott opened up the protected hills to Cortec for prospecting and gave the company an exclusive right to operate on November 30, 2007.

In the new case, Cortec says there is no provision in law that requires the commissioner to get consent from Nema, the National Museums of Kenya and the Kenya Forest Service, which had teamed up to oppose its application.

“The court did not address itself to the issues raised in the application for judicial review against the decision of the minister to cancel the special licence,” Mr Juma states.

He says Section 27 of the Mining Act states that in case of revocation of a prospecting right, its shall be lawful for the commissioner of mines to call upon the holder to show cause, and not the minister, within a specified time.

Failure to comply with such an order or should the cause shown not be adequate in the opinion of the minister, the appellant claims, then the licence may be summarily revoked.

ULTERIOR MOTIVE

It is the appellants’ contention that the law was not duly followed before their licence was revoked.

The suit papers indicate that Cortec had operated in Kwale for five years as per a Gazette notice of November 30, 2007 and had been renewing its licence every two years.

Mr Juma has restated that the minister’s action was based on ulterior motives and not on law, and now wants the court of appeal to intervene.

“The decision failed to take into account Cortec’s legitimate expectation that having invested in the prospecting of the mining resources and having been issued with a licence, the appellant was entitled to see its investment bear fruit,” the firm says.

Last week, Environment and Land court judge John Mutungi ruled that Mr Balala was right to revoke the licence, and criticised Mr Biwott for abdicating his duty and giving Cortec the special licence.

He said Cortec never got the nod from stakeholders as the procedure dictates.

SOURCE: http://www.nation.co.ke/news/Balala-Cortec-licence-fight-heads-to-top-court/-/1056/2663174/-/a00tb5z/-/

UK Government must defend against big oil and mining dirty tricks

21st March 2015

Anti-corruption campaigners urge the UK Government to divorce itself from industry guidelines that would create transparency black-holes

Oil and mining bodies together with companies such as BP and Royal Dutch Shell have drafted industry compliance guidelines that weaken the impact of new UK anti-corruption laws. (1) A coalition of over 800 organisations including Global Witness, CAFOD, Oxfam, Christian Aid and ONE are urging the Government to reject industry’s proposed guidelines which suggest that the law allows companies to keep certain payments secret. (2)

The UK transparency law aims to cut corruption by forcing UK-based extractive companies to publish highly detailed reports of their payments to governments – such as taxes, royalties and licence fees – broken down by each of their projects worldwide; these payments are worth billions of pounds each year. Disclosure provides citizens in resource-rich but impoverished countries with the means to “follow the money” and hold governments and companies to account.

However, the draft industry guidelines suggest that companies can lump projects together when they report, and withhold from public view certain crucial payments they make as part of joint ventures. The result is that billions of pounds worth of payments will remain hidden from view and vulnerable to corruption.

Industry claims that their guidance is a reasonable interpretation of regulations; however, Global Witness believes that the draft industry guidelines go against the letter and intent of the law (3). EU legal expert Paul Lasok QC, Head of Monckton Chambers agrees, calling the guidelines “highly unsatisfactory … to the extent of being positively misleading” and states that they guide companies to report in a manner that could be “in breach of the regulations”. (4)

In addition, this week’s disclosures by Norwegian oil major Statoil under a similar law show that the UK industry guidelines are not fit for purpose. “Statoil’s highly detailed report puts the UK industry’s approach to shame,” said Dominic Eagleton, Senior Campaigner at Global Witness. (5)

Global Witness applauds the UK Government’s record for leading on extractives transparency up to this point. Lib-Dem Business Minister Jo Swinson and Department for Business officials championed the law, and the Prime Minister made the issue a top priority during his G8 Presidency in 2013. (6)  “The UK has established a strong transparency law. The Government must stand firm against big business and divorce itself from industry guidelines that would allow companies to continue making payments in secret” says Eagleton.

Ends   

Contact: Dominic Eagleton – +44 7738 713 016 / deagleton@globalwitness.org

Notes

(1)   The Reports on Payments To Governments Regulations 2014 require UK-domiciled and UK-listed extractive companies, such as Royal Dutch Shell, BP, Rio Tinto, Anglo American, Total and BHP Billiton, to publish the payments they make to governments for all countries of operation on a project-by-project basis: bit.ly/12RGpb2.

The industry guidelines are being produced by the International Association of Oil and Gas Producers and the International Council on Mining and Metals. A draft of the industry guidelines from November 2014 is available here: bit.ly/1uB1nRo. The document has been modified slightly since November.

(2)   Global Witness, CAFOD, Oxfam, Christian Aid and ONE are members of the Publish What You Pay collation, which promotes greater transparency in the global extractive industries and is made up of over 800 civil society organisations from more than 60 countries: bit.ly/1wQQSRQ.

(3)   The industry guidelines state that companies can artificially group together distinct projects and report on them as a single project. For more information please see http://bit.ly/1x9c2L0. The guidelines also state that if a company makes payments indirectly to a government via a partner company in the same joint venture project, these payments do not have to be disclosed. A legal opinion obtained by Global Witness states unequivocally that both these elements of the guidelines go against the letter and intent of the law.

(4)   Opinion, In the Matter of Global Witness and in the Matter of Draft Industry Guidance Concerning the Reports on Payments to Governments Regulations 2014: bit.ly/1x9gutc

(5)   Statoil’s report interprets the definition of project in line with the Norwegian regulations, and discloses payments from joint venture projects that are made indirectly via a project partner company: bit.ly/1MQK8Ht.

(6)   The UK Prime Minister David Cameron called on G8 member states to introduce similar laws during the UK’s Presidency of the G8 in 2013: bit.ly/1NUK771. G8 member states committed to making progress towards establishing common extractives transparency laws in the final G8 2013 communiqué: http://bit.ly/1pIwoFP (para 36).

SOURCE: https://www.globalwitness.org/library/uk-government-must-defend-against-big-oil-and-mining-dirty-tricks

Kenya: Cortec loses mining licence in court suit

CORTEC Company director Jacob Juma leave Milimani law court yesterday after the ruling of a case involving CORTEC revocation of its Mining licence.Photo/Philip kamakya

CORTEC Company director Jacob Juma leave Milimani law court yesterday after the ruling of a case involving CORTEC revocation of its Mining licence.Photo/Philip kamakya
Justice Mutungi delivers CORTEC ruling at Milimani high court yesterday.Photo/Philip kamakya

Justice Mutungi delivers CORTEC ruling at Milimani high court yesterday.Photo/Philip kamakya

BY SUSAN MUHINDI

March 21, 2015

A mining company yesterday suffered a major setback after the High Court upheld the decision of Cabinet Secretary Najib Balala’s order to revoke its licence.

Justice John Mutungi said Balala has a duty to preserve public interest and is entitled to revoke the licence.

He said the acquisition of the mining licence by Cortec was not in compliance with the law.

“The minister is empowered to revoke the licence where there is breach in issuance. He acted lawfully,” Mutungi said.

The judge said the commissioner of mines abused his office and Balala had to step in and ensure due process was followed.

“The commissioner neglected to perform his duties by giving an invalid licence. He acted in breach of the Mining Act and constitution and in breach of public trust,” he said.

Mutungi said the commissioner of mines could not issue a proper mining licence as the area was protected by the Kenya Forest Service and no consent had been issued by the National Museums of Kenya.

The judge also dismissed an argument by Cortec in which it claimed it was being sidelined.

He said 42 other licences have also been revoked and Cortec is not being targeted.

Mutungi said if Cortec was aggrieved by the CS’s decision, it should have appealed rather than review the merits of the verdict by instituting judicial review proceedings

The judge said KFS, the National Museums and National Environment Management Authority had to give a consent before any licence was issued.

Nema and KFS denied that Cortec had obtained consent from them.

Balala cancelled licences for Cortec Mining and other companies on grounds that they were irregularly awarded.

Cortec was allegedly licensed to mine niobium and rare earth metals at Mrima Hills, Kwale county, an area believed to contain minerals in excess of $600 billion.

Cortec director Jacob Juma had initially said Balala demanded Sh80 million bribe from the company.

SOURCE: http://www.the-star.co.ke/news/cortec-loses-mining-licence-court-suit#sthash.izTdy5Lw.dpuf

Kenya: Mining Firms Back Out of New Licence Issuance Scrutiny

16th March 2015

Half of the 43 mining firms whose licences were revoked last year following a probe into validity of their applications have failed to recover their permits.

A report released on Saturday by the Ministry of Mining, after a year of reviewing new submissions by the firms; states that the 22 did not reapply. The firms were instructed to put in fresh applications after their initial ones were found to be invalid and were given more time to fulfill the set requirements.

“In order to ensure that the process was fair and transparent, all the 43 licence holders/applicants were given an opportunity to demonstrate that the mineral titles issued met the legal and technical requirements, through re-submission of documentation that accompanied their applications,” said Cabinet secretary Najib Balala in the mining implementation status report.

Only four companies were found to have met all criteria and their suspensions were promptly lifted.

Three companies were found to have grossly violated the mining laws in acquisition of their licences leading to outright revocation of the permits.

Out of the 43, that of Cortec Mining Kenya Limited is in abeyance pending a court ruling after it sued the government following the suspension in January 2014. The company is eyeing mining operations in Kwale’s Mrima Hills.

The re-applications of seven other companies failed to meet the full licence requirements. The companies were however removed from the suspension list on condition that they work towards meeting all requirements. So far only one has managed to meet requirements over the last one year and has been cleared while the rest had their re-applications rejected.

According to the Mining Ministry, after preliminary reviews of the suspensions, a total of 32 firms were given a chance to make fresh applications after their previous licences were found to be invalid.

Out of the 32, two withdrew their applications completely, six re-applied and their applications were subsequently approved, two firms asked for more time to meet the requirements and their requests have been granted while 22 did not respond at all.

The various mining licences were reviewed after Balala ordered a probe in September 2013 on all licences issued between January to May 2013 – which was a government transition period – out of concern that most applications were rushed through at a time when a new government was being ushered in.

The report by the taskforce investigating the applications reported in January last year that majority of the licences were irregularly issued, some without proper documents while others went to to speculators who had no intention of prospecting for any minerals but hoped to later sell the rights to the highest bidder.

SOURCE: http://allafrica.com/stories/201503162164.html