Minerals and Africa’s Development: The African Mining Vision (AMV) and the ECOWAS Mineral Development Policy (EMDP) ECOWAS Public Officials Workshop, Accra, 3-4 November 2014, Accra, Ghana By Valerio Bosco, Ph.D Economic Affairs Officer AMDC - Governance Team

Objectives of Presentation  Present objectives, content and policy directions of the Africa Mining Vision (AMV) and the ECOWAS Mineral Development Policy (EMDP)  Compare AMV and EMDP approach to the role of mining in socio-economic developmental mining and key policy areas;  Explore strategies and progress in the domestication of AMV and EMDP through Country Mining Visions.

Introduction The AMV and the EMDP both The AMV and the EMDP both recognize the need for strategic shifts in the role of mining in the transformation of Africa’s economies. recognize the need for strategic shifts in the role of mining in the transformation of Africa’s economies. aim at transforming the mining industry in ways that optimize the contribution of the sector to overall economic development; aim at transforming the mining industry in ways that optimize the contribution of the sector to overall economic development; seek to foster a coherent integration of mining sectors into local economies to optimize mining benefits to local communities and economies. seek to foster a coherent integration of mining sectors into local economies to optimize mining benefits to local communities and economies. The AMV stresses that developing a strong, capable and robust African mineral resources sector requires an astute understanding of Africa’s relative advantages in the global mineral value chain. The AMV stresses that developing a strong, capable and robust African mineral resources sector requires an astute understanding of Africa’s relative advantages in the global mineral value chain.

Introduction The EMDP acknowledges commitment to the AMV and seeks to operationalize it at the sub-regional level, taking into account the specific context of the West African region. The EMDP acknowledges commitment to the AMV and seeks to operationalize it at the sub-regional level, taking into account the specific context of the West African region. The implementation of the AMV and EMDP is expected to take place at continental, regional and national levels - each level provides advocacy platforms for various stakeholders. The implementation of the AMV and EMDP is expected to take place at continental, regional and national levels - each level provides advocacy platforms for various stakeholders. A coherent and coordinated strategy among all the stakeholders is critical for optimum results from the implementation process A coherent and coordinated strategy among all the stakeholders is critical for optimum results from the implementation process

The African Mining Vision (AMV)  Adopted in February 2009 by the African Union Assembly of Heads of State and Government as the key continental framework to promote mineral resource- based development and structural transformation on the continent.  Seeks to foster “a transparent, equitable and optimal exploitation of mineral resources to underpin broad- based sustainable growth and socio-economic development.”  AMV objectives: i. developing a comprehensive knowledge of Africa’s mineral endowment; ii. promoting a sustainable and well governed mining sector that is inclusive and appreciated by all stakeholders including surrounding communities.

The African Mining Vision  Creating a mining sector that: i) harnesses the potential of artisanal and small scale mining to advance integrated and sustainable rural socio-economic development ; i) harnesses the potential of artisanal and small scale mining to advance integrated and sustainable rural socio-economic development ; ii) creating a sustainable and well-governed mining sector that effectively garners and deploys resource rents ii) creating a sustainable and well-governed mining sector that effectively garners and deploys resource rents iii) is knowledge driven and key component of a diversified, vibrant and globally competitive industrializing African economy. iii) is knowledge driven and key component of a diversified, vibrant and globally competitive industrializing African economy. iii) environmentally friendly, socially responsible and appreciated by all stakeholders and surrounding communities. iii) environmentally friendly, socially responsible and appreciated by all stakeholders and surrounding communities. iv) catalyses and contributes to broad-based growth and development through upstream, downstream, side-stream and infrastructure linkages; increases the level of investment flows into mining and infrastructure projects to support broad socio- economic development. iv) catalyses and contributes to broad-based growth and development through upstream, downstream, side-stream and infrastructure linkages; increases the level of investment flows into mining and infrastructure projects to support broad socio- economic development.

AMV Principles/Tenets for Development AMV AMV Diversified competitive industry Broad economic & social linkages Transparent accountable sector Optimized rents Used on economic and social development Good governance rooted in development Communities & citizens participate in assets Equity in distribution of benefits ASM improves rural livelihoods Integrated into rural &national economy Environment al & social responsibilit y Build human and institutional capacities Knowledge economy at all levels of mining value chain

Policy Directions from the AMV  Proactive role of government in the mineral sector;  Expanding role of linkages (backwards, side-stream and forward linkages, knowledge, fiscal) of minerals in the local economy;  Optimizing fiscal policy regimes;  Transforming artisanal and small scale mining (ASM) into a development tool;  Creating transparent and accountable mineral regimes;  Supporting regional integration and cooperation;  Upholding high standards of safety, health and environmental protection; integrating CSR into local and national socio-economic development plans

AMV- Action Plan An Action Plan was also approved by AU policy organs in It includes the following clusters: An Action Plan was also approved by AU policy organs in It includes the following clusters: i. mineral rents and management; ii. geological and mining formation systems; iii. human and institutional capacities; iv. artisanal and small scale mining; v. mineral sector governance; vi. research and development, vii. environmental and social issue; viii. linkages and diversification; and ix. mobilizing mining and infrastructure investment; x) policy and regulatory frameworks x) policy and regulatory frameworks

The AMDC: Mission and Activities  Formally launched in December 2013;UNECA-AUC- AfDB-UNDP as implementing partners.  Its mission: working with member States and their national and regional organizations to enable mineral resources play a greater transformative role in the development of the continent through increased economic and social linkages.  Facilitator of choice to support AU member States in implementing the African Mining Vision.

The AMDC: Mission and Activities  Tracking and coordinating implementation of AMV;  Identifying gaps and areas of need in MS and providing expertise to address such needs;  Undertaking policy research to develop policy strategies and options for realizing the AMV;  Providing think-tank capacity for embedding the AMV into Africa’s long term development;  Implementing continuous advocacy and information campaign in order to engage stakeholders on AMV implementation processes including CMV

AMDC results area 1. Policy and Licensing; 2. Geological and Information System; 3. Governance and participation; 4. Artisanal and small-scale mining; 5. Linkages and diversification; 6. Human capacity and institutional capacities; 7. Communication and Advocacy In each of those areas, AMDC carries out specific activities.

ECOWAS Directive for Harmonizing of Guiding Principles Outlines eight (8) guiding principles for the mining sector, they include:  Mineral as State resources (vesting of mineral resources in the State, acquiring mineral rights etc.)  Protection of the environment (environmental protection obligations)  Protection of national interest (Stability Agreements, Fiscal framework etc.)  Access to Information (Duty to maintain records, transparency, good governance, public access to information etc.)  Human Rights obligations and mining activities (Human Rights obligations, sustainable development and local community interests etc.)  Dispute resolution (complaints procedure, settlement procedures etc.)  Institutional and Implementation Arrangements (focus of Member States, The president of ECOWAS Commission etc.)  General and Final provisions (general provisions, publication, difficulties of implementation etc.)

 Harmonize and coordinate policies and programmes relating to the exploitation of natural resources  Ensure high standards of accountability for mining companies and government agencies.  Promote human rights, transparency, and social equity and also provide protection for local communities and the environment in mining areas.  Balance the need to provide incentives for investors and protecting the revenue base and country resources  Improve transparency in mineral policy formulation and implementation processes in mining within the sub region. ECOWAS Directive for Harmonizing of Guiding Principles: Directions

15 The ECOWAS Mineral Development Policy ECOWAS Gazette of 2012 officially launched the EMDP developed as part of the implementation of the ECOWAS Directive on “Harmonization of Guiding principles and policies in the Mining Sector of 2009” EMDP Vision: to harness mineral resources capital to facilitate sustainable economic growth and integrated socio-economic development in the region Mission: to promote the development of an efficient mineral sector in West Africa EMDP (i) complements the ECOWAS Vision (ii) Recognizes the AMV and commits to align to it (iii) Recognizes and incorporates aspirations of the Yaoundé Declaration of on ASM (2002); (iii) Recognizes and incorporates aspirations of the Yaoundé Declaration of on ASM (2002); (iv) Recognizes the Durban Declaration of 1997 and (v) Developed through a consultative process

16 ECOWAS Mineral Development Policy - Objectives i. Improvement in geological and mineral information; ii. Optimization of the mineral value chain iii. Regulation and development of ASM iv. Harmonization of institutional, legislative and regulatory frameworks v. Enhancement of environmental protection vi. Continuous enhancement of human and technological capacity vii. Promotion of sustainable and integrated development of local communities, mainstreaming CSR viii. Promotion and respect of human rights ix. Balance investor incentives with national development objectives - OVERALL THRUST GUIDED BY THE DIRECTIVE

i. Improvement of geological and mineral information ii. Improvement and management of mineral revenues iii. Local content policy of mineral operations iv. Building institutional, human, technical and financial capacities v. Improvement of the Institutional, legal and regulatory frameworks vi. Sustainable development and corporate social responsibility vii. Development of infrastructure for improved access to mineral sites viii. Development of Artisanal and Small Scale Mines ix. Strengthening regional cooperation 17 ECOWAS Mineral Development Policy: Themes (Articles )

AMDC Result Areas/AMV Action Plan EMDP Programmes i.Geological and Mining Information Systems ii.Building Human and Institutional Capacities iii.Artisanal and Small Scale Mining iv.Governance and Participation v.Policy and Licensing vi.Linkages, Investment and Diversification + ADVOCACY AND COMMUNICATIONS i.Geological and Mineral Information ii. Mineral Revenues Management iii.Local Content in Mineral Operations iv.Building institutional, technical,and financial capacity v.Institutional, Legal and Regulatory Frameworks vi.Sustainable Development and Corporate Social Responsibility vii.Infrastructure Development viii.Artisanal and Small Scale Mining ix.Regional Cooperation 18 AMDC Result Areas and EMDP: Alignment

AMDC Result Areas and EMDP: Alignment (example) AMV Action Plan/AMDC Result Area EMDP Programme Result Area/Programme: Geological and Mining Information Overall Objectives: Develop comprehensive knowledge of Africa’s mineral endowment to underpin investment in exploration and mine development Overall Objectives: Improve geological and mineral information Actions: strengthen capacity of Geological institutions, increase regional mapping, upgrade mineral inventories, strengthen African collaboration through Organisation of African Geological Surveys, continent- wide information exchange, standardize geological information management methods – cadastre, stratigraphy, legends, etc Actions: budgetary support by member States to acquisition of geological information, information exchange, establish MDF, encourage local participation, technical support to Geological institutions, allocate resources for R&D

Some areas of AMV-EMDP alignment Some areas of AMV-EMDP alignment  Role of Linkages,  Local Content and Value Addition;  Fiscal Regimes and Taxation;  Transparency and Accountability; and  Regional Integration and Cooperation;  Community development

LINKAGES, LOCAL CONTENT AND VALUE ADDITION: AMV  Expanding the role of linkages in the local and regional economy is key to the implementation of the AMV - various forms of linkages - up-stream, down-stream, lateral, knowledge must be established in pursuant of the AMV.  National governments are required to promote the development of industrial minerals and develop local content policy and identifying and promoting viable beneficiation projects.  National governments are expected to pay attention to trade and investment rules and treaties (such as WTO, EPAs, FTAs, BITs and other related agreements) that could constrain efforts towards linkages, local content and value-addition.

LINKAGES, LOCAL CONTENT AND VALUE ADDITION: ECOWAS DIRECTIVE AND EMDP  In line with EMDP, Member States commit to; I. Promote the participation of national private sector and public- private partnerships in the Mineral Sector; II. Facilitate access to funding for local participation in mineral projects in the Community; III. Promote the pooling of local investment funds for access by local mineral operators.; IV. Promote the development of national expertise and the participation of Community experts in the development of the mineral sector. V. Promote the adoption of procurement policies by mineral operators that give preference to goods and services produced locally; VI. Give preference to Community citizens who meet the skills requirements and professional standards in recruitment

Fiscal Regimes or Taxation - AMV  The AMV calls for review of fiscal regime leading to ‘enhanced share of mineral revenue accruing to African mining countries’. It is in this context that contracts are supposed to be renegotiated.  One of the main concerns in this regard borders on various leakages (transfer mis-pricing, cumbersome tax holidays and exemptions).  However the AMV maintains that fiscal regimes should ensure that profitability of mines do not suffer in order not to discourage investment.  The AMV also pays attention to revenue management, particularly through transparent and participatory manner to tackle major challenges facing mining countries

Fiscal Regimes and Taxation - EMDP  Adoption of the principle of resource rent taxes in the fiscal regimes of member States;  Transparency in the approval (parliamentary approval) of mineral agreements.  Mining Legislation must aim to optimize and protect revenues due and accruing to the State from mining activities.  The fiscal framework should addresses specific fiscal issues - exemptions to the payment of customs duties, payment of PAYE by all employees of mining companies both local and foreign, taxation of remittances.  Fiscal systems should ensure fairness and cater for the interest of all stakeholders – governments, investors and communities  Ensure transparency in mineral revenue collection and equitable distribution of revenues between local and national authorities

Transparency and Accountability :AMV  The AMV advocates for meaningful participation by all stakeholders – especially communities and CSOs. Respect for human rights is an integral component of transparency and accountability. To achieve this, the following activities must be implemented: strengthen transparency and access to information; strengthen transparency and access to information; improve public participation in governance systems; improve public participation in governance systems; resource and build capacities of communities and legislatures to provide effective resource and build capacities of communities and legislatures to provide effective oversights and make informed decisions; and oversights and make informed decisions; and empower human rights institutions to monitor and enforce human rights standards in the mining sector. empower human rights institutions to monitor and enforce human rights standards in the mining sector.

Transparency and Accountability: EMDP  Mining right holders are to provide timely annual reports on its mineral operations to the appropriate authority.  False, misleading, incomplete or knowingly misrepresenting information to the public or State shall be penalized; Mining Rights granted should be considered public and therefore documents made available to the public.  Member States are encouraged to sign up to the Extractive Industry Transparency Initiative (EITI). Member States are required to conduct periodic audit and report on the activity of mining companies and mining right holders are required to cooperate with the competent entity or individual conducting such audit.  No data confidentiality on issues which relate to environmental degradation, claimed degradation of human health, or worker safety.

Regional Integration and Cooperation: AMV  The implementation of the AMV involves Regional Economic Communities (RECs)  The RECs are broadly required to ensure regional harmony in the implementation of the AMV and to ensure that existing processes towards integration and cooperation are enhanced  RECs coordinate certain activities including taking the lead in corridor development and the development of regional infrastructure - foster regional integration, cooperation, sub-regional linkages and diversification.

Regional Integration and Cooperation: EMDP  The alignment of EMDP to AMV ensures that policy development in the sub-regional are in sync with continental aspirations;  Promote harmonization of mineral development codes and mineral acts  Develop; regional geological maps, trans-border mineral development regulatory frameworks, regional spatial development corridors

Conclusions  Both AMV and EMDP underscore importance of the regional and sub- regional dimension in promoting developmental mining; linkages, local content, value additional, optimal fiscal and taxation framework, geological information, promotion of ASM, optimum revenue management system, community development,  Coordinated CMV processes and mineral sector reform initiatives aimed at promoting AMV-EMDP alignment provide a crucial opportunity to foster regional and sub-regional integration by facilitating economic transformation and inclusive growth beyond the national dimension.  The need to exploit regional opportunities within national planning mechanisms and policies for the extractive sector is underlined in the recently developed Country Mining Vision Guidebook.  Timeframe for the domestication of AMV should be designed along with a monitoring and evaluation framework ( ECOWAS approach could be adopted).

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