9 July 2017

Tanzania: Govt Advised On Natural Resources

Dar es Salaam — The government has been advised to take concrete measures to ensure that its citizens benefit from abundant natural resources.

The measures include implementing extractive sector laws and regulations, reveal companies' beneficial ownership, disclose gas and mineral sales, combat corruption and use data to improve institutions' policies and practices.

Those are recommendations of the Resource Governance Index (RGI) 2017 report launched here last week.

In its findings, the report reveals that better natural resource governance can lift 1.8 billion of the global population out of poverty and that while most countries still faced daunting natural resource governance challenges, wealth isn't a precondition for good governance.

Countries fail to follow laws

Furthermore, the RGI 2017 findings show that countries have failed to follow own laws and regulations on natural resources and that failure to control of corruption was because of increased gap between legal frameworks and adequate implementation.

Also, the report establishes that countries with good or satisfactory voice and high-level of accountability performed better in value realisation and revenue management.

Presenting the RGI 2017 report at a breakfast debate hosted by a policy forum, the Natural Resource Governance Institute (NRGI) manager for East and Southern Africa, Mr Silas Olan'g, said this year's report covers 81 countries across the five continents in the world.

"While 47 countries were measured on oil and gas subsector, 26 on the mining and eight were assessed on both subsectors accumulating a total of 189 assessments. The countries were assessed using a composite score comprising three major components: value realisation, revenue management and enabling environment," he said.

He said realisation and revenue management covered key policy areas administered by NRGI and that enabling environment covers broader governance context.

According to him, Tanzania scores a composite of 53 out 100 in the oil and gas and 49 out 100 in the mining subsector. The country scored 65 over 100 in oil and gas in terms of value realisation. In the mining subsector the score is 54 of 100 and that both subsectors scored 53 of 100 in enabling environment component.

In a group of 55 peers, Tanzania ranks the 22nd in the overall oil and gas score, 8th in value realisation, 34th in resource management and 25th in enabling environment. The country is ranked the 42nd among 89 countries carrying mining activities, the 38th in value realisation, 48th in resource management and 40th in creating an enabling environment.

"The RGI 2017 findings imply that the country is doing well in oil and gas as compared with the mining sector especially in areas of value realisation and creating enabling environment. However, much should be done in the area of revenue management for the country to adequately benefit from abundant natural resources," he said.

He said the report recommended that Tanzania strengthen and implement extractive laws and regulations, particularly environment, local communities, local content, transparency and accountability.

Mr Olan'g said report has revealed significant difference in average score of laws and practices and that the gap was wider as resource governance becomes poorer, suggesting that good governance in formulating good laws, rules and respective implementation was required.

He said the government was advised to expose true beneficial owners of mining and oil and gas companies, commercial interests of officials and associates, contractual deals struck by the governments, revenue management issues and payments made by the companies.

"Public officials are also supposed to declare stakes they own in the companies. According to report where such declarations are made, they never get published," said Mr Olan'g during the presentation.

According to him, this year's report calls for strengthened regulations and presence of independent governing boards appointed on grounds of a well-defined system putting emphasis on technical expertise instead of political affiliations.

"It is also recommended that an open civic space to citizens and journalists lacking freedoms to speak and hold the government accountable should be protected. Also, rule of law should be strengthened, corruption control need to be scaled up and that specific laws on extractives subsector which will have great impacts to the country should be formulated," he said.

RGI 2017 wants free access to resource governance information by improving data institutions, policies and practices. Improved institutional framework will allow regular and timely data gathering, analysis and dissemination, suggesting that data should be released using open data charter standards to improve transparency.

Former Bariadi East MP John Cheyo said the findings had been released at the right time as two presidential committee reports on minerals showed the country was losing revenue heavily due to gaps between legal framework and implementation of the laws.

He said the country's legal framework failed to make clear the state's ownership of natural resources, suggesting that if they were owned by the public it was supposed to be included in the legal documents including the constitution.

He said since the country's extractive industry was in the hands of the foreign investors, public auditors were not allowed to audit the companies' financial statements.

"The government is expected to form a team of experts to meet their Barrick Gold Plc counterparts to re-negotiate contracts and other Mineral Development Agreements entered by the country in previous years. The new laws will serve as a platform for the Tanzania team during the negotiation, which I totally support."

Three bills passed

Parliament recently passed the Natural Wealth and Resource Contracts (Review and Re-negotiation of Unconscionable Terms) Bill, 2017; (Permanent Sovereignty) Bill 2017; and the Written Laws (Miscellaneous Amendments) Bill, 2017.

Sikika executive director Irenei Kiria commended President John Magufuli's administration for tabling the bills in Parliament under the certificate of urgency, urging that the move was in line with RGI 2017 recommendations that call for strengthened legal frameworks.

"Civil society organisations have for years been demanding transparency in the extractive industry. We have been shouting for disclosure of contracts and respective revenues. We have been fighting for public ownership of the natural resources, how can I oppose that when the government wants to enact laws which will empower the country?"

Tanzania Petroleum Development Corporation board chairman Sufiani Bukurura said external influence on natural resources outcome wasn't mentioned in the RGI 2017, suggesting that regardless of geographical disparities, countries have greatly been negatively influenced by external forces in decision making to its natural resources.

"Therefore, developed countries shouldn't be assessed alongside developing countries in the RGI and that mining subsector should be separated from the oil and gas during the assessment," said Prof Bukurura.

Public and policy engagement expert, Evans Rubara questioned the role of civil social organisations in advising the government on formulating policies, laws and regulations that are beneficial to the country.



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