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Communities empowered to probe extractive investors

4th January 2012
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Foreign investment in several sectors of the economy has mostly been a welcome development by many Tanzanians, having noticed the death of many parastatal organizations and the decline of the agricultural sector, the mainstay of the national economy.

Their dissatisfaction has, however, for almost a decade now, been on the strategic investment in the mining, oil and natural gas.

Generally, most people believe that what the investors are doing is simply enter into agreements, some of them suspiciously dubious, and venture into extraction of the country’s natural resources with impunity.

Reitred Judge Mark Bomani’s contention is that the country’s natural resources, particularly those in the mining sector, should unquestionably benefit the citizenry.

Judge Bomani told a one-day stakeholders forum of Tanzania Extractive Industrial Transparency Initiative (TEITI) recently that the prolonged outcry of Tanzanians, including the opposition parties, on the use of the country’s natural resources, had led to the formation of the institution.

Tanzania Extractive Industrial Transparency Initiative (TEITI), is a local institution which was invited to join the Extractive Industries Transparency Initiative (EITI), a global standard for transparency and accountability in the oil, gas and mining sectors.

EITI is responsible for setting standards of transparency in extractive industries, those engaged exclusively in extraction of oil, gas and minerals.

The objective is to enable Tanzanians to have access to information on contracts entered between the investors and the government, including their implementation.

Through the institution, the EITI process helps civil society groups, media and the public at large, to systematically review and assess what is being paid by the mining companies in terms of taxes and royalties.

It is through EITI that the community will also want to know whether a particular company has strategies towards eradication of HIV/Aids and better standard of life for communities concerned as well as avoidance of environmental pollution.

Judge Bomani, Chairman of the multi-stakeholder working group of TEITI said his team plans to reconcile tax payments made by major oil, gas and mining companies to the government in 2009 and 2010.

“It is envisaged that the group will widen the scope of reconciliation to include more gas and mining firms operation in Tanzania,” Bomani said.

Initially, the team started with 12 major oil and gas mining companies and now wishes to involve more firms. Presently, there are over 200 extractive companies in the country.

Companies which were involved in the first reconciliation exercise were Bulyanhulu, North Mara, Golden Pride, Buzwagi, Diamond Mine, Geita and Tulawaka (Mwadui Shinyanga).

Others are Tanzania One Mine (Arusha) and three gas companies (Pan African Energy Tanzania Ltd), Artumas Group partners (gas) Ltd and Songas.

According to Bomani, the second reconciliation report is expected to correct discrepancies revealed in the preparation of the first report.

“There is need to ensure that Tanzania gets large benefits,” he said, adding that many issues have not been tackled, such as tax exemption and effects to the environment, including pollution.

“There is, for example, urgency of establishing a special fund which will be used in taking care of the environment in mining areas,” he said, adding that extraction of minerals, oil and gas seriously affected the environment.

Other stakeholders called on transparency in preparation of investment agreements.

“The community should be able to demand corporate social services from investors as well as research findings in their areas,” said a stakeholder.

Dr. Stephen Munga, one of the multi-stakeholder working group members said the chamber was formed to enable communities benefit from incomes generated from their respective areas.

“To succeed in this endeavour, there should be enhanced transparency and accountability, with the ordinary wananchi overseeing that this is done,” he explained.

“Natural resources are the property of all of us. You should put pressure and report where you feel not satisfied,” he asserted.

Dr Munga , who is Bishop of the Evangelical Lutheran Church of Tanzania [ELCT], North-Eastern Diocese, said even with the proposed five percent royalty fee paid by the extractive companies, corporate social responsibility should be enhanced further.

“In Tanzania, many taxes remain uncollected. In fact the people who comply with voluntary tax payment are only ordinary wananchi,” he said, adding that most rich businessmen do not comply with tax payment obligations, including investors.

Elaborating, he said if tax paid to the government towards the 2008/2009 budget of 4 trillion by extractive companies was a paltry 1.4 percent, how does the country expect development growth?

Kilindi Member of Parliament Beatrice Shelukindo said despite her district boasting of enormous mineral wealth, its people were wallowing in poverty.

“I agree that the royalty paid to the government should be raised to five percent. In Australia it is 30 percent,” she said.

“Five percent is too small though. Who is blocking the rise? Tell us so that we sideline him/her,” quipped the outspoken legislator, calling on government institutions, NGOs and the private sector, to avail transport to journalists in order to unearth problems faced by communities in various parts of the country, particularly those in the mining industry.

SOURCE: THE GUARDIAN
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