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The role of the s tate in mining. SADC Lawyers’ Association Annual Conference 23 August 2014 Olivier Binyingo Director – Afriwise Consult. The role of the state in mining. Importance Development of realistic mining policies
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The role of the state in mining SADC Lawyers’ Association Annual Conference 23 August 2014 Olivier Binyingo Director – Afriwise Consult
Importance • Development of realistic mining policies • Enactment of legislation that provides the right incentives for policy implementation • Constructive negotiation of mining agreements • Examples • Understanding key principles of project finance • Understanding the importance of financialmodeling • Understanding international taxstructuring Understanding the role of the private sector
Importance • Local communities feel that they are yet to see the ‘upside’ of natural resource extraction • Local communities are becoming increasingly empowered • The state has the primaryresponsibilitytowardsthesecommunities • Examples • Understandingthe issues aroundinvoluntaryresettlement • Understandingthe needs in terms of education and capacity building required for local communities to benefitfromminingactivities Understanding the role of local communities
The role of the state following the end of colonialism • Strongemphasis on national sovereignty • State as regulator and producer (full ownership of naturalresources) • Stagnation & decline of the miningindustry • Redefinition of the state’srole by late 1980’s • Strongemphasis on privatesector as the driver of the miningsector • State only as regulator and deregulation • Despite FDI in the miningsector, the sector has not been a catalyst for broadbasedeconomicdevelopment • New era at the start of the 21st century? • Resource nationalisminspired changes • Stronger focus on environmental impacts • Stronger focus on social impacts Understanding its own role (as a regulator)
IFC Performance Standards on Environmental and Social Sustainability • RuggiePrinciples • EquatorPrinciples • OECD Due Diligence Guidance for ResponsibleSupplyChains of MineralsfromConflict-Affected and High-Risk Areas Understanding its own role (as a regulator) – Transnational framework
Foreign Corrupt Practices Act (USA) • BriberyAct (UK) • Dodd Frank Act (USA) Understanding its own role (as a regulator) – Foreign legislation
Harmonization of Mining Policies, Standards, Legislative and Regulatory Frameworks in Southern Africa • ECOWAS Directive on the Harmonization of GuidingPrinciples and Policies in the Mining Sector Understanding its own role (as a regulator) – Regional harmonization
Adherence to voluntary standards, codes and certification schemes • Intra-firmmechanisms for regulating social performance • Inter-firmmechanismssuch as contracts and service standards Understanding its own role (as a regulator) – Self-regulation by the private sector
How will the existence and development of multiple sources of regulation impact the role of the state goingforward? Understanding its own role (as a regulator) – Discussion
AfricaMining Vision http://www.africaminingvision.org/amv_resources/AMV/Africa_Mining_Vision_English.pdf • Corporate Social Responsibility and development in Africahttp://www.sciencedirect.com/science/article/pii/S0301420711000377 • The Role of Self-Regulation in ImprovingCorporateSocial Performance https://www.csrm.uq.edu.au/publications/the-role-of-self-regulation-in-improving-corporate-social-performance-the-case-of-the-mining-industry • FromFragility to Resilience – Managing Natural Resources in Fragile States in Africahttp://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/From_Fragility_to_Resilience_-_Managing_Natural_Resources_in_Fragile_States_in_Africa_-_Summary_Report.pdf Reading suggestions
A Ground Floor, Rosewood House, Ballywoods Office Park, 33 Ballyclare Drive, Bryanston 2191, Johannesburg P Postnetsuite #305, Private Bag X21, Bryanston 2021 Olivier Binyingo Director E olivier.binyingo@afriwise.com T +27 (0)10 5968517 M +27 (0)71 8858240 F +27 (0)11 4632093 S olivier.afriwise