1 |
Towards the adoption of the extractive industries transparency code and the implications for transparency in Malawi's mining sectorChawani, Cynthia January 2014 (has links)
Since time immemorial extractive industries have been shrouded in secrecy worldwide. This
stemmed countries with high levels of corruption and weak administrative systems and
vulnerable regulatory frameworks to seldom develop or economically grow from extractive
industries revenues. This has led to the identification of transparency as being the evasive
factor worldwide to help attract more investments, avoid the resource curse and curb
corruption. Malawi is no exception to this trend and has one of the lowly performing and very
obscure mining sectors. That though Transparency is a fundamental principle of the
Constitution of Malawi; it is not reflected in the Mining laws of Malawi which were enacted
before the Constitution.
The secrecy that hovers over the activities of the mining sector has provoked various
stakeholders to demand their inclusion in the processes of concluding contracts due to lack of
visible benefits from existing investments. To avoid difficult forums of stakeholders
gathering to make a decision on intended investments to be made, there has been a call to
make the mining industry more transparent. This entails the introduction of public scrutiny
post-contract making which remains the discretion of the Minister.
Attempts to introduce transparency have led to the introduction of Transparency initiatives
whose main objective is to ensure transparency is evident in extractive industries such as
mining. Malawi is currently deciding whether to adopt one such initiative called the
Extractive Industries Transparency Initiative. It is a strong advocate for transparency in
extractive sector which is voluntary in nature and mandates the disclosure of revenues
collected by government and the companies to report the amounts paid to government.
Adoption of EITI is pegged to immensely improve the mining sector through increased FDI
inflow.
This dissertation argued for Malawi to adopt EITI because it found that the Malawian mining
sector is governed by ancient laws which are silent on transparency principles. This thesis
found that EITI though is a stepping stone for Malawi, it lacks several crucial factors in its
scope and the thesis highlights several shortfalls of the initiative. EITI implores revenue
transparency over other forms of transparency. And this research found that Malawi needs
contract transparency more than revenue transparency because Malawi’s mining sector is
contract-based rather than legislative-based thereby recommending Malawi include contract
transparency to the standard EITI scope. It was further concluded that Malawi emulates
Liberia by extending their scope to include other extractive sectors like agriculture besides
the classified Oil, Gas and Mining.
This thesis spurred a debate as to enforcement and compliance of EITI. It was discovered that
Malawi is already a member to various international instruments that advocate the transparent
means of administering the extractive sector but sadly these are not fully implemented in the
mining sector. This is attributable to the fact that Malawi’s laws stipulate that newly adopted
international laws or standards do not have binding force until converted into domestic
legislation. Consequently, since EITI is termed ‘soft law’ because it lacks enforcement, this
study concluded that Malawi needs to enact a domestic law to ensure enforcement. This was
drawn from the comparable analysis of Nigeria and Liberia who have enacted EITI
legislation to ensure effective implementation.
It was drawn from this analysis the need to enact legislation codifying EITI in order to ensure
compliance and as a form of enforcement. With the idea of introducing a new EITI law, this
thesis found that EITI if adopted will be aligned to Malawi’s international obligations but its
principles contrary to domestic laws. This study, nevertheless, concluded these
inconsistencies can be ironed by explicitly stating in the EITI code that it is an exception to
the general laws such as tax laws which prohibit disclosure of taxes paid to third parties.
Based on these findings, this dissertation recommends the improvement of transparency in
the mining sector through the adoption of EITI. That Malawi should codify it into domestic
legislation to convert its voluntary element into mandatory. That this new law should
expressly state EITI as an exception to existing laws which it is inconsistent with. It further
recommends Malawi includes agriculture to the standard EITI scope as the administration of
which could also help boost the economy of which it heavily contributes to. It also
recommends the amendment of the mining laws to reflect transparency principles stipulated
in the superior law of the land the constitution, international instruments and core principle of
EITI. It points out the importance of government to involve existing extractive companies as
the adoption of EITI directly impacts them and therefore consultation is vital. / Dissertation (LLM)--University of Pretoria, 2014. / gm2015 / Centre for Human Rights / LLM / Unrestricted
|
Page generated in 0.1093 seconds