1. 1 SESA of Mineral Sector, Sierra Leone STRATEGIC ENVIRONMENTAL ASSESSMENT IN AFRICA: CHALLENGES AND OPPORTUNITIES – REGIONAL WORKSHOP Fernando Loayza, Senior SEA Specialist, World Bank Addis Ababa, Ethiopia June 16-19, 2008

2. 2 Sierra Leone, Mining SESA October 2006 – July 2007 Key Partners: National Commission for Environment and Forestry (NaCEF), Ministry of Mineral Resources (MMR)

3. 3 Context Significant mineral endowment and booming metal pricesSignificant mineral endowment and booming metal prices –High contribution to national economy: 20% GDP, 90% Exports, 8% Fiscal revenues, 14% Employment (in the 90s) Outdated laws and regulations and weak capacityOutdated laws and regulations and weak capacity Informal activities (i.e. smuggling, water pollution, land deg.) plague the sectorInformal activities (i.e. smuggling, water pollution, land deg.) plague the sector Huge expectations for employment and community development at the local levelHuge expectations for employment and community development at the local level

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7. 7 Motivation Bank’s budgetary support (DPL) to GoSL identifies need for an SEA of the mining sectorBank’s budgetary support (DPL) to GoSL identifies need for an SEA of the mining sector GoSL requested for assistance to develop its minerals policyGoSL requested for assistance to develop its minerals policy Bank initiated negotiation with GoSL about a loan for restructuring the mining sector (the Mining Technical Assistance Project)Bank initiated negotiation with GoSL about a loan for restructuring the mining sector (the Mining Technical Assistance Project)

8. 8 SESA’s Objectives Provide strategic framework for strengthening minerals sector’s contribution to sustainable developmentProvide strategic framework for strengthening minerals sector’s contribution to sustainable development Provide a mechanism for policy dialogue on the mining sector reformProvide a mechanism for policy dialogue on the mining sector reform Inform the preparation of the Mining Technical Assistance ProjectInform the preparation of the Mining Technical Assistance Project

9. 99 SESA process and stages SESA process and stages Situation Analysis Analysis of Transmission Mechanism Policy and Institutional Adjustments Public Participation Environmental and Social Priorities Intersectoral SEA Steering Committee

10. 10 Key features of SESA Identification of key environmental and social priorities by stakeholdersIdentification of key environmental and social priorities by stakeholders Analysis of transmission mechanisms from mining policy to priority issuesAnalysis of transmission mechanisms from mining policy to priority issues Political economy analysisPolitical economy analysis Action Matrix with outcomes and monitoring indicatorsAction Matrix with outcomes and monitoring indicators

11. 11 Public Participation Active involvement of stakeholders through the entire SESA processActive involvement of stakeholders through the entire SESA process –Two rounds of regional and one national workshops, focus groups, case studies Identification of priorities and validation of SESA findings in regional workshopsIdentification of priorities and validation of SESA findings in regional workshops Stakeholders contributed to the SESA’s policy recommendations at the national workshopStakeholders contributed to the SESA’s policy recommendations at the national workshop

12. 12 Public Participation Regional Priorities EmploymentEmployment InfrastructureInfrastructure Community dev. and participationCommunity dev. and participation Regulations for blastingRegulations for blasting Cross cutting Priorities Resettlement and land compensationResettlement and land compensation Post-closure reclamationPost-closure reclamation Sanitation and water pollutionSanitation and water pollution DeforestationDeforestation Child LabourChild Labour Regional and cross-cutting priorities resulted from the consultation process

13. 1313 Public Participation

14. 14 Key Priority Areas Regional and local Development(Infrastructure) Poverty Alleviation Poverty Alleviation (inclusion of vulnerablesectors) Mining as a sustainable development driver EnvironmentalGovernance

15. 1515 Action matrix and risk analysis Short, medium and long-term actionsShort, medium and long-term actions Monitoring indicators for each priority areaMonitoring indicators for each priority area Actions are grouped as policy interventions and technical assistanceActions are grouped as policy interventions and technical assistance Potential political economy risks that might hamper the reform process for each priority area are identifiedPotential political economy risks that might hamper the reform process for each priority area are identified

16. 16 Political Economy Findings Mining sector reform would change the distribution of benefits and costs among different stakeholders –Wide benefits to main losers of current mining policies (land owners, local communities, vulnerable groups) –Organization and empowerment of weak stakeholders (women, artisanal miners, etc.) is critical and possible

17. 17 Environmental Governance: Political economy analysis Vulnerability of NaCEF to pressures from the government & outsidersVulnerability of NaCEF to pressures from the government & outsiders Some players might prefer direct bilateral negotiation with companies and oppose tripartite negotiationsSome players might prefer direct bilateral negotiation with companies and oppose tripartite negotiations Judiciary may oppose to the establishment of alternative dispute resolution mechanismJudiciary may oppose to the establishment of alternative dispute resolution mechanism

18. 18 Community Benefits: Political economy analysis Lack of capacity at all levels of GovernmentLack of capacity at all levels of Government Inability or unwillingness of companies to meet their obligationsInability or unwillingness of companies to meet their obligations Pressure to companies to provide services, infrastructure, etc. may lead to conflictsPressure to companies to provide services, infrastructure, etc. may lead to conflicts Elite capture of mine employment and service contractsElite capture of mine employment and service contracts

19. 19 Chiefs would resist any attempt to reduce their power with respect to granting mining licenses and access to landChiefs would resist any attempt to reduce their power with respect to granting mining licenses and access to land Supporters/middlemen likely to resist any responsibility for the degradation caused by miners supported by themSupporters/middlemen likely to resist any responsibility for the degradation caused by miners supported by them Supporters likely to oppose to GoSL efforts to register artisanal minersSupporters likely to oppose to GoSL efforts to register artisanal miners Poverty Alleviation: Political economy analysis

20. 20 Overall, the fact that the sector thrive under lack of formality and control from the government poses significant risks for reform Building Support to Reform It is critical to: Increasing legitimacy of the reform by paying special attention to vulnerable groupsIncreasing legitimacy of the reform by paying special attention to vulnerable groups Achieving society-wide buy-in to the reformAchieving society-wide buy-in to the reform

21. 2121 SESA’s initial outcomes Strengthened the voices of environmental stakeholders in the mining reform (NaCEF, landowners and others)Strengthened the voices of environmental stakeholders in the mining reform (NaCEF, landowners and others) Analysis informed the preparation of the Bank’s Mining Technical Assistance ProgramAnalysis informed the preparation of the Bank’s Mining Technical Assistance Program Proposed reform acknowledges:Proposed reform acknowledges: –Institutions-based environmental risks for mining reform and commits to mitigate them –Need for a system of check and balances: tripartite negotiation and transparency in accessing land and mineral rights

22. 22 THANK YOU. I. Fernando Loayza, Ph.D. Senior SEA Specialist Environment Department The World Bank 1818 H. Street, NW Washington, DC 20433 Tel. (202) 458-7117 Fax. (202) 477-0565