Institutional Context of Natural Resources Management


Legislative Framework

Claude Kabemba's picture

Director of the Southern Africa Resource Watch (SARW)

January 13th, 2014


Legislative Framework

The legislative framework of a country must make bold statements on the way natural resources should be perceived. Mineral resources should be extracted in accordance with the legislative provisions and national regulations. A national mineral policy is the primary tool through which a country enunciates the role of all players in minerals exploration. Mineral policy defines how minerals will be extracted and states clearly the socio-economic and environmental responsibilities of both the companies and the government.

Recommended Principles and Guidelines on the Legislative Frameword

i.                  The Constitution must provide a broad guide that promotes people-centred development through the exploitation of natural resources.

ii.                  Extractive industries must be legislated for by Parliament.

iii.            SADC countries must update and modernise all their laws related to extractive industries to ensure that they increase state revenues, protect people’s rights and the environment, and contribute to sustainable development.

iv.            The laws and regulations must protect the rights of all people as articulated in international conventions, such as the UN Declaration on the Rights of Indigenous Peoples and the International Labour Organisation Convention.

v.            Special laws and regulations must be put in place to support the empowerment of previously marginalised and excluded groups, such as the promotion and empowerment of women at all levels of the extractive industries value chain.

vi.            Government must adopt laws, policies and penalties to restrict the direct involvement of public servants and politicians in their private capacity, in the extractive industries to avoid conflicts of interest.

vii.            Government must develop a national land use plan that is complimented by other laws at the relevant administrative levels, which defines land use plans according to the suitability of the land and the quantity and quality of resources, in order to guide investments.

viii.            Government must develop mandatory and clearly defined environmental policies and regulations to avoid negative impacts on ecosystems, and monitor, evaluate and enforce them. The policies and regulations must contain provisions for ecological compensation.

ix.            Government must put in place policies and regulations that oblige companies to have internal policies that ensure that they demonstrate responsibility for the environmental impact of their production processes throughout the life-cycle of their operations.

x.            Government should require companies, through legislation, to report on their profits, expenditures, taxes, fees and community grants paid in each financial year on a project-by-project basis.

xi.            The legislation must give government the power to suspend, revoke or cancel a mineral concession where the holder  fails to comply with the provisions of the law or with the conditions of the concession.

xii.            Government must have empowerment policies that make provision for previously disadvantaged groups to have access to opportunities based on mineral resources –  for example by reserving industrial mineral concessions for its citizens or for nationally-incorporated companies with more than 51 percent local shareholding, and then empowering these concession title holders to adequately and profitably mine these minerals.

xiii.            The law should allow for public interest litigation (PIL) and move away from the judicial process, locus standi. When it comes to extractive industries, citizens’ rights should be reinforced through the adoption of PIL principles, and non-governmental organisations (NGOs) and human rights lawyers should be afforded the locus standi to represent affected persons, communities or classes of persons.

xiv.            The law should allow for mining development agreements to be overseen by Parliaments.

Capacity for Natural Resource Management

The natural resource sector is complex and sophisticated and requires high-level technical and managerial capacity. Policy-makers in African countries endowed with natural resources often lack the organisational capacity, sufficient expertise and analytical skills required to elaborate sound, progressive, legislative and fiscal policies as well as industrial and sector development strategies, which are adapted to the local context and aim to maximise development potential. This can notably lead to imbalances during contract negotiations, resulting in inequitable deals being struck between multinationals and governments of commodity-rich countries to the detriment of the latter and their people. 

Due to the critical importance of the extractive sector to the economy, the public budget and the environment, African countries rich in natural resources must develop adequate institutions with the relevant capacity to engage with well resourced, highly-efficient and extremely sophisticated foreign company interests.

Recommended Principles and Guidelines for Natural Resource Management

i.            Countries must put in place ‘world class’ public mining administration by addressing capacity constraints and developing adequate human and material capacities and skills for all state agencies involved in the extractive industry.

ii.            All government ministries and departments involved in resource management must have the necessary human and logistical capacities to undertake technical, social, environmental and economic evaluation and regulation of their respective sector. The following are necessary:

1.      Revised system of merits and incentives to retain skilled staff;

2.      Revised terms and conditions of employment to allow the recruitment of competent staff and retention of the best officials in key positions in the public service; and

3.      Enhanced staff working environment (vehicles, computers, exposure to international environment, training, twining with other countries administrations, on the job training, etc.).

iii.               Relevant government departments (oil, mining, labour, gender/women, finance, local government, economic development, land and environment) must have sufficient capacity to manage key information, such as production figures, statistics, sales, pollution, land, taxes and other data in order to track the sector’s performance.

iv.               A community consultation framework must be established, which assigns the roles and responsibilities of the government, company, NGOs, donors and local communities in relation to addressing the environmental, social and economic impacts of mining activities.

v.               Public office bearers (including politicians, senior civil servants and government representatives) should declare their business interests.

vi.               Anti-corruption agencies – such as those institutions charged with tax collection as well as the Office of the Auditor General, the Office of the Ombudsman and the Finance Department – must be strengthened. The independence of these institutions should be enhanced to ensure that mineral revenues do not end up in the hands of corrupt officials or criminals.

vii.               One-stop mineral administration systems should be established and provided with sufficient capacity to deliver on their critical mandate.

The laws must ensure that there are harsh punishments for companies and individuals who decide to be on the wrong side of the law. Companies that are granted mining licences should meet all requirements, especially legal, safety and environmental standards.

Under common law (and most SADC countries are common law countries), only persons who have a direct interest in a matter can institute litigation on it. This is premised on the view that the public or other bodies should not be allowed to champion the cause of others through the judicial process, locus standi.

Sometimes the rights of the affected communities are violated by the state or by giant multinational companies where matters often become too technical or expensive for ordinary citizens to handle.

This happens in Ghana and Sierra Leone, where they are made public.

Some Key Features: Retention of public servants is a critical issue in building institutional capacities. Several suggestions (see above) can be made to ensure that qualified staff remain in their posts. Financing of such reinforcement must come from public budget to ensure transparency and independence of the Administration. Financing principles can be devised so as to ensure that sufficient amount of funds are allocated to allow smooth running of the Administration and financing of needed investment. Performance evaluation systems can be set up linking budget available for the reinforcement schemes to mineral commodities revenues collected (in percentage of total export, percentage of GDP, of countries revenues etc.). This will require continuous reinforcement of the capacity of public administrators to ensure an effective administration of the extractive industries, in particular revenue management and enforcement of mining policies, laws and regulations. The availability of domestic capacity and expertise will determine whether a country can overcome many of the other challenges involved in resource management.

About the author(s)

Claude Kabemba is the Director of the Southern Africa Resource Watch (SARW). In 2006, the Open Society Initiative for Southern Africa (OSISA) asked him to spearhead the formation of SARW. He holds a PhD in International Relations (Political economy) at the University of the Witwatersrand (Thesis: Democratisation and the Political Economy of a Dysfunctional State: The Case of the Democratic Republic of Congo). Before joining SARW, he worked at the Human Sciences Research Council and the Electoral institute of Southern Africa as a Chief Research Manager and Research Manager respectively. He has also worked at the Development Bank of Southern Africa and the Centre for Policy Studies as Policy Analyst. Dr. Kabemba’s main areas of research interest include: Political economy of Sub Saharan Africa with focus on Southern and Central Africa looking specifically on issues of democratization and governance, natural resources governance, election politics, citizen participation, conflicts, media, political parties, civil society and social policies. He has consulted for international organizations such Oxfam, UNHCR, The Norwegian People’s Aid, Electoral Commissions and the African Union. He has undertaken various evaluations related to the work of Electoral Commissions and civil society groups interventions in the electoral process in many African countries. He is regularly approached by both local and international media for comments on political and social issues on the continent. His publication record spans from books (as editor), book chapters, journal articles, monographs, research reports, and newspaper articles.


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