WHO IS WHO IN THE MINING SECTOR IN TANZANIA: THE INSTITUTIONAL FRAMEWORK AND HOW IT WORKS

THE PRESIDENT OF THE UNITED REPUBLIC OF TANZANIA.

The President of the United Republic has been given a key role through the new section 5 (a) of the Mining Act which vests the entire property and control of minerals to the President who holds this in trust of the citizens of the United Republic. The same is reiterated under section 4 (2) and 5 (2) of the Sovereignty Act. Previously, the minerals were vested in what I consider to be a lose term of the “United Republic”. Section 5 (b) of the Mining Act gives the Government lien over the minerals and this was briefly discussed in “Shikana Mining Series No.1”).

This provision of empowerment has really given the President the force and legal right to protect the minerals in its control and property, this is perhaps explaining the actions so far by the president who has commissioned investigations as well as summoned individuals in the mining industry to the State House for queries and discussions. Considering the current President’s efforts to fight corruption and the numerous corruption scandals associated to the energy and natural resource sector, it would make sense to concentrate such a responsibility as holding the resources in trust by the President.

The President also has the power to declare any area which is subject to mining operations a “controlled area”. The
procedure is that the President consults with the Minister responsible for Local Government Authorities and that the controlled area is also gazette. Special conditions will be prescribed to the “controlled area” and contravention of these conditions will constitute an offence.

THE MINISTER OF MINERALS

Part III of the Mining Act which was entitled “Administration” was repealed and replaced by new provisions which specifically define the role of the Minister of Minerals, unlike the previous Act. Section 19 of the Mining Act provides that the Minister is responsible for preparing policies, strategies and legislative framework for the exploration and exploitation of mineral resources and monitoring the implementation of the same. The Minister further has the responsibility of monitoring all establishments with responsibility of the Ministers for minerals and report to the Cabinet.

The Minister also has the duty to promote mineral resources in Tanzania for research and exploitation. The Minister’s powers are removed with regards to Special Mining Licenses, whereby the new Mining Commission is the entity that compiles the application and submits the same to the Minister who is responsible to present this to the Cabinet of Ministers for approval. Furthermore, the old section 10 of the Mining Act empowered the Minister to enter into Mining development agreements (MDAs) Development Agreements however, this has now been repealed.

THE NATIONAL ASSEMBLY.

The National Assembly, also known as The Parliament of the United Republic of Tanzania, in accordance with section 12 of the Sovereignty Act and section 4 of the Contract Review Act, has the authority to review all mineral agreements and can also renegotiate any existing or future agreements.

Section 5 of the Contract Review Act provides that all mineral agreements have to be submitted to the National Assembly. This provision, particularly giving the power to the National Assembly to approve future agreements was heavily debated by parliament again under certificate of urgency back in September 5, 2017. It was suggested that the powers of the National Assembly to approve future contracts that dealt with natural resources generally
should be removed since power of the National Assembly will be extended ultra vires. It therefore followed that the Written Laws (Miscellaneous Amendments) Act No. 3 of 2017 amended section 47 (5) of the Petroleum Act which removed the power of the National Assembly to approve future Production Sharing Agreements as well as other similar agreements under the Petroleum Act, however the same was not made for the mineral agreements although it is understood that the intention was strongly present.

Previously, agreements entered into by the Minister were shrouded under secrecy therefore these provisions that empower the National Assembly to ensure checks and balances are met as well as the added procedure of the approval of licenses by the Cabinet of Ministers for strategic
investments, such as those under Special Mining Licenses, are is a real positive step towards transparency and reducing certain irregularities on the whole.

Section 6 of the Sovereignty Act states that it is unlawful to make any arrangement or agreement over natural resources except where the interests of Tanzanian citizens are approved by the National Assembly and fully secure.

MINING COMMISSION

This is a new institutional body that is created by the amended Mining Act. In reading the Mining Act and in particular the interpretation clause (section 4 of the Mining Act), it would seem that the Mining Commission has taken over the functions that were previously the responsibility of the Mining Advisory Board,the Commissioner of Minerals, the Zonal Mines Offices and the Tanzania Minerals Audit Agency. The Mining Commission is composed of the Chairman, Treasury, Ministry of Lands, Ministry of Defense, Ministry responsible for Local Governments, Attorney General, Federation of Miners Association in Tanzania and two individuals who possess knowledge on the mining industry.

There is exclusion of the small – scale miners and mineral dealers, the ministry of environmental protection and institution for higher education. The Ministries are represented by Permanent Secretaries and equally the Federation of Miners is also represented by its Secretary.

The Mining Commission’s responsibilities are enumerated under section 22 (a) to (v) of the Mining Act. The functions are extensive and wide-ranging. The Mining Commission’s functions include the review of special mining license applications before submission to the Cabinet; granting of prospecting and primary mining licenses; suspension and revocation of licenses; the monitoring of the mining operations (including then assessment of the quantity and quality of minerals produced); the audit of expenditures for tax purposes; the assessment of local content performance and investment in the local economy and the monitoring of environmental management. In the next week’s article, We will elaborate more on this as we will examine the environmental impact assessment in relation to Mining industry. Other duties include to make regulations for the industry.

THE ATTORNEY GENERAL’S OFFICE.

The Written Laws (Miscellaneous Amendments Act (No.3) 2017 that was passed on September 15, 2017 provides that the Attorney General shall have the right to intervene in any suit or matter instituted by or against the Mining Commission. This provision was added after and provides protection to the Mining Commission where it is suing or being sued. In this event, the Government Proceedings Act provisions shall apply to the proceedings of the suit or matter that is instituted against the Government.

MINISTER OF CONSTITUTIONAL AFFAIRS.
The gatekeeper of the Natural Wealth and Resources Permanent Sovereignty Act of 2017 is the Minister of Constitutional Affairs. It is important to point out that the Written Laws Miscellaneous Amendments Act No. 3 of 2017 amends section 3 of the Sovereignty Act to include under the definition of “natural resources”, mineral resources.

As such, the Minister of Constitutional Affairs has the duty to of making regulations that will prescribe the code of conduct for investors in natural wealth and resources. The Minister also has to develop the minimum guidelines for inspection, monitoring and evaluation of investments in natural wealth and resources; and create regulations that are incidental or conducive to the effective implementation of this Act.

The Minister of Constitutional Affairs also has the power to make regulations for the implementation of the Natural Wealth and Resources Contracts (Review and Renegotiation of Unconscionable Terms) Act, 2017.

THE JUDICIARY OF TANZANIA.

Typically, the jurisdiction clause in contracts governing minerals and natural resources generally provided for foreign international arbitration in the event of dispute resolution.

Section 11 (2) of the Sovereignty Act formally provides that for disputes arising from extraction, exploitation or acquisition and use of natural wealth and resources will be adjudicated by judicial bodies or other organs established in the United Republic and in accordance with laws of Tanzania. Section 11 (3) of the Sovereignty Act goes further in providing that all contractual arrangements should include such provision regarding dispute resolution.

COMMISSIONER FOR MINERALS.

Previously, the Commissioner for Minerals had extensive powers to administer the Mining Act, however the new Mining Act, section 20 reduces the functions of them Commissioner for Minerals to advising the Minister of Minerals on matters related to the mining sectors. In practice though, the Minister delegates the duty of foreseeing policy implementation to the Commissioner for Minerals as well as the role for promotion.

MINES RESIDENT OFFICERS.

The Mines Resident Officers are responsible for the day to day monitoring and reporting of mining activities at mining sites and they are to be stationed at every mining site. The Mines Resident Officers have the task of also verifying records, information and production reports kept by the holder of mineral rights and they also have an oversight over the mineral storage facility at the mine as well as the mineral transportation to the Government Minerals Warehouse (section 27 of the Mining Act).

GEOLOGICAL SURVEY OF TANZANIA.

Section 27A establishes the Geological Survey of Tanzania (the “GST”), which is responsible for all matters related to geological activities other than prospecting, exploration and mining activities. In particular, the GST shall;
(a) advise the Minister on geological matters;
(b) undertake the geological mapping of Tanzania, and may for that purpose, engage contractors;
(c) provide data concerning the geology and mineral resources of Tanzania, and generally assist                                           members of the public seeking information concerning geological matters.

It has other extensive responsibilities such as promoting investment in the mining sector through the use of data, acquiring Geo-scientific data and information that will assist the Minister of Minerals in making its decisions, etc. The GST has the responsibility to establish the National Mineral Resources Data Bank.

Mining data is extensively regulated whereby the Mining Act explicitly states that the mineral data generated by the Mining Act, whether it is from the GST or the mining operators, is owned by the government (section 27F (2) of the Mining Act). Furthermore, the data which is submitted by the mineral rights holder is given free of charge to the GST (section 27F (4) of the Mining Act). The Mining Act provides however that the GST can allow the mineral right holders to market the use of data “on terms to be agreed” (section 27F (5) of the Mining Act).

Seeing as mining data makes up the value of the project, it is difficult to see how mineral right holders can be comfortable with such an arrangement.

A major change in the new mining act is the question of Indemnity. Previously all officers discharging duties under the mining act were exempt of liability. The new law provides that all officers are liable. This is encouraging and in line with the Government’s fight against corruption.

 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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