The role of the state in mining
SADC Lawyers’ Association Annual Conference
23 August 2014
Olivier Binyingo
Director – Afriwise Consult
Understanding the role
of the private sector
The role of the
state in mining
Understanding the role
of local communities
Understanding its own
role (as a regulator)
• Importance
• Development of realistic mining policies
• Enactment of legislation that provides the right incentives for policy
implementation
Understanding
the role of the
private sector
• Constructive negotiation of mining agreements
• Examples
• Understanding key principles of project finance
• Understanding the importance of financial modeling
• Understanding international tax structuring
• Importance
• Local communities feel that they are yet to see the ‘upside’ of
natural resource extraction
Understanding
the role of
local
communities
• Local communities are becoming increasingly empowered
• The state has the primary responsibility towards these communities
• Examples
• Understanding the issues around involuntary resettlement
• Understanding the needs in terms of education and capacity
building required for local communities to benefit from mining
activities
• The role of the state following the end of colonialism
• Strong emphasis on national sovereignty
• State as regulator and producer (full ownership of natural resources)
• Stagnation & decline of the mining industry
Understanding
its own role (as
a regulator)
• Redefinition of the state’s role by late 1980’s
• Strong emphasis on private sector as the driver of the mining sector
• State only as regulator and deregulation
• Despite FDI in the mining sector, the sector has not been a catalyst for
broad based economic development
• New era at the start of the 21st century?
• Resource nationalism inspired changes
• Stronger focus on environmental impacts
• Stronger focus on social impacts
Understanding
its own role (as
a regulator)
Understanding
its own role (as
a regulator) –
Transnational
framework
• IFC Performance Standards on Environmental and Social
Sustainability
• Ruggie Principles
• Equator Principles
• OECD Due Diligence Guidance for Responsible Supply Chains of
Minerals from Conflict-Affected and High-Risk Areas
Understanding
its own role (as
a regulator) –
Foreign
legislation
• Foreign Corrupt Practices Act (USA)
• Bribery Act (UK)
• Dodd Frank Act (USA)
Understanding
its own role (as
a regulator) –
Regional
harmonization
• Harmonization of Mining Policies, Standards, Legislative and
Regulatory Frameworks in Southern Africa
• ECOWAS Directive on the Harmonization of Guiding Principles
and Policies in the Mining Sector
Understanding
its own role (as
a regulator) –
Self-regulation
by the private
sector
• Adherence to voluntary standards, codes and certification
schemes
• Intra-firm mechanisms for regulating social performance
• Inter-firm mechanisms such as contracts and service standards
Understanding
its own role (as
a regulator) –
Discussion
How will the existence and
development of multiple sources of
regulation impact the role of the state
going forward?
• Africa Mining Vision
http://www.africaminingvision.org/amv_resources/AMV/Africa_Mining_V
ision_English.pdf
• Corporate Social Responsibility and development in Africa
http://www.sciencedirect.com/science/article/pii/S0301420711000377
Reading
suggestions
• The Role of Self-Regulation in Improving Corporate Social Performance
https://www.csrm.uq.edu.au/publications/the-role-of-self-regulation-inimproving-corporate-social-performance-the-case-of-the-miningindustry
• From Fragility to Resilience – Managing Natural Resources in Fragile
States in Africa
http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-andOperations/From_Fragility_to_Resilience__Managing_Natural_Resources_in_Fragile_States_in_Africa__Summary_Report.pdf
Olivier Binyingo
Director
A
E olivier.binyingo@afriwise.com
T +27 (0)10 5968517
M +27 (0)71 8858240
F +27 (0)11 4632093
S olivier.afriwise
Ground Floor, Rosewood House,
Ballywoods Office Park, 33
Ballyclare Drive, Bryanston
2191, Johannesburg
P
Postnet suite #305, Private Bag
X21, Bryanston 2021