27 August 2018

Rwanda - New Mining Law Jitters

Photo: allafrica.com
Mining (file photos).

Kampala, Uganda — Rwanda has a new mining law designed to improve extractives sector governance, accountability, safety, and environmental protection. Gazetted on Aug.13, the amended law on mining and quarry operations recommends hefty fines and jail terms for mining companies and individuals that contravene standards leading to worker injury, disability, incurable disease, or death. The law also scraps issuance of artisanal miners' licences.

It is now mandatory for all licensed mining companies to file financial statements with the government and Rwanda Revenue Authority annually, and give government an environmental restoration plan with clear planned activities and related budgets and an environmental rehabilitation guarantee.

The new financial reporting standard is seen as tightening loopholes for money laundering, illegal flows, and ensuring the country and communities in mineral-rich areas benefit fully from these resources. This would be a welcome improvement in governance and accountability in the extractives sector. It could ensure that the country gains adequately from its natural resources to enhance lives of citizens and support their development.

Miners will also have smaller exploration and mining areas as the size of available concessions has been reduced.

Many miners working underground are injured or die due to loopholes in safety measures at sites while some mines are not safe and lead to incurable diseases.

Mining sector workers are praising the new law, saying it will end impunity and collusion by mining firms.

A former mining supervisor with over 12 years of experience in underground operations says the new law "will make mining companies more responsible to safeguard lives of workers".

"If the managers and the owners of mines know that they will be heavily penalised or jailed, they will improve safety in mines... Many mining firms don't care about the safety or welfare of workers; they are just after money," said a worker on condition of anonymity.

According to the worker, some mine owners connive with district and government mines inspectors who concoct reports without doing proper inspection and feed the ministry on lies and added that the long jail terms or heavy fines in the new law could stop these fraudulent practices and boost safety in the mines.

But some of the provisions in the new law have not been well received, with some sector players describing them as "not friendly" and contradictory to some existing laws.

According to the Rwanda Association of Miners (RAM), parts of the new law that criminalise work-related accidents at mining sites contradict existing labour laws that do not criminalise work-related accidents in favour of compensation.

RAM members say that criminalising work-related accidents could prove counterproductive. They want work-related accidents to be compensated based on life insurances and pension, according to Frank Butera, the executive secretary of RAM.

The association says they have already raised their concerns with the Rwanda Mines, Petroleum and Gas Board (RMB).

Under the new law, a person found culpable of causing mining site human injury, disability, incurable disease, or death faces up to 10 years in jail or fine of up to Rwf10 million. Mining and quarrying companies will also be slapped with Rwf30 million if found culpable of negligence or bad intent, while employees will be prosecuted under the new law.

For lapses in safety measures that will cause human disability or incurable disease, one is liable to imprisonment for a jail term ranging from one year to three years and a fine of between Rwf3 million and Rwf5 million, while one can spend between seven years and 10 years in prison and a pay a fine ranging from Rwf5 million to Rwf10 million upon conviction for mine accidents that lead to death.

Article 55 of the new law that deals with non-compliance with standards has also raised anxiety among RAM members. According to this section, any person who does not comply with standards in mineral exploration, exploitation, processing or trading or quarry operations commits an offence. They face up to six months or one year in jail and a fine of between Rwf1 million and Rwf3 million for flouting standards leading to human injury and disease or environmental destruction, upon conviction.

The miners say they were never consulted during the amendment process of the new law and are still trying to understand what it means.

Butera adds that criminalising site standard breaches could have been aimed at stopping negligence by some mining coming, but it may be interpreted differently by implementers.

"I think that could be the idea, but then when it is not stated; prosecution will interpret the organic law differently. This could be a problem," he says. Butera says other sections of the law are also not clear and might require a review.

Sector players say scrapping issuance of artisanal miner's licences could hurt the country's production and the mineral export targets. The Rwanda Mining Board (RMB) which sets the targets has projected to realise $600 million in mineral export revenues from 10,000 tonnes this financial year compared to $373 million recorded last fiscal year. According to RAM, the majority its members are in this category and it plans to address the issue with RMB as many firms still lack modern equipment which is expensive. When contacted about the issues raised by miners, the mining board said they will respond soon.

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