11 October 2018

Rwanda: Regional Legislators Seek Stronger Legal Regime on Natural Resources

Lawmakers and stakeholders in the mining sector from across the East African Community have called for strategies on how to use the region's mineral wealth to improve people's lives.

This was echoed on Wednesday as three members of the East African Legislative Assembly (EALA) conducted public consultations in Rwanda on the EAC Mining Bill 2017.

The current legal regimes, the legislators argue, favour investors to maximise profit while putting governments in weak positions.

"Strategies focusing on promoting the exploitation of natural resources in the region should be hinged on how the mineral utilisation would have long term positive impact on the livelihoods of the population," said MP Mohamed Habib Mnyaa from Tanzania who is leading the EALA team.

His delegation comprises MPs Pierre Celestin Rwigema and Alex Bahati, both from Rwanda.

The draft law aims to provide a harmonised legal framework for the regulation of mining operations in the community as countries search for ways it benefit from its mineral resources.

The public hearing is being conducted in all EAC partner states by the Assembly's standing committee on agriculture, tourism and natural resources, so as to provide an opportunity to stakeholders to participate in the bloc's legislative process.

In Kigali, as is the practice in all member states, the MPs consulted relevant officials and experts from government, private sector and other institutions to enrich the draft law.

Under article 114 of the EAC Treaty, member states agreed to collectively foster cooperation in efficient management and sustainable use of natural resources within the Community.

According to the EAC Vision 2050, natural resources management encompasses forestry, wildlife and mineral resources and other natural resources.

The committee is working in six groups currently covering all six partner states simultaneously. They will later present their report to the Assembly during the second reading of the draft law end next month in Arusha, Tanzania.

Rwandan stakeholders have agreed to put their comments together and share with the EALA Committee before October 20.

MP Odette Uwamariya, a member of the Rwandan Chamber of Deputies, noted that the Rwandan mining law passed in August is thorough on issues pertaining to the sector and can be used as a good point of reference.

Narcisse Dushimimana, a legal affairs specialist from the Rwanda Mines, Petroleum and Gas Board, noted that they received a copy of the draft law more than a month ago and, generally, appreciated its content.

"We compared it with our Rwandan law. It's almost similar to what we have here," Dushimimana said.

However, he had concerns over an element in part three (licensing and permitting) of the draft law which states the legislation of each country shall include the resolution of disputes, including the right of an applicant for, or a holder of, a mineral right to seek redress against the partner state or a competent authority, in the event that an application for a mineral right is rejected or a mineral right is suspended, terminated or not renewed.

Dushimimana requested lawmakers to consider that an applicant "who has actually not yet got a license" should have no right to take a partner state to court.

On the other hand, Chris Picton Shyaka,industrial development analyst at the Rwanda Development Board (RDB), requested that a clause stating that the initial capital investment for the threshold for the use of mineral, investment of mining agreement shall not be less than $750 million be removed.

Shyaka argued that: "The Rwandan investment law removed the threshold element. What we do is that, if someone is interested, we analyse and consider their capability. We want decent jobs for our people; so we examine everything, carefully. Such a threshold can deter investors. It is not applicable here [Rwanda]."

Stabilisation provisions

Dushimimana also had issues with having stabilisation clauses, something he said is largely a tool for [foreign] investors to mitigate or manage risks associated with their project.

Stabilisation means a specific legal commitment by a government which seeks to secure a mining or investment agreement or contract against any future government action or change in law (legislative or regulation).

Dushimimana warned that stabilisation clauses help investors to maximise their own benefits while often preventing states from taking action and they are not a good thing to consider when drafting such laws.

He said: "I think the stabilisation clause is actually something that should be raised by investors but not our partner states. This is a tool that investors use when they want a good deal. But having it in a law puts states in a weak position. We better include things such as incentives (for investors) but not stabilisation clauses."

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