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AIMES 11: African governments must adopt alternative mining regimes


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STATEMENT

ELEVENTH ANNUAL STRATEGY MEETING OF THE AFRICAN INITIATIVE ON MINING, ENVIRONMENT AND SOCIETY (AIMES)

JUNE 24-26TH, NAIROBI, KENYA

Introduction

We, 32 members of the Africa Initiative on Mining, Environment and Society (AIMES) from Angola, Cameroon, Democratic Republic of Congo, Ghana, Kenya, Lesotho, Mali, Nigeria, Sierra Leone, South Africa, Tanzania, Zambia, Zimbabwe and our partners from Canada and the United Kingdom participating in its eleventh Annual Strategy meeting call upon African governments to adopt alternative mining regime that optimises the net benefit of mining and protect the mining sector from being a transmission channel for international crises such as the commodity and credit collapses that occurred late 2008 to date. The meeting which was organised by Third World Network-Africa and hosted by Action Aid took place from June 24-26th, 2009, in Nairobi, Kenya.

   Objective of meeting

 Conceived as a platform for analysis, dialogue and information sharing, the objective of the eleventh annual strategy meeting was to:

a) Build the capacity of members of AIMES to appreciate the impact of the global economic crises and the implications for advocacy and the reform agenda

b) Reflect on how the economic recession influence the draft model mining regime developed last year in order to re-activate it as an advocacy instrument.

c) Provide a platform for exchange and sharing of information

d) Adopt a strategy for the delivery on the positions and outcome of the meeting

 Context

The eleventh annual strategy meeting took place at a time the world is confronted with global economic crises (i.e. the financial crisis arising from speculative anarchy, a collapse in the price of some of Africa’s strategic commodities, in particular platinum, diamond and copper). During the early part of 2008 the world witnessed commodity crisis which was a combination of severe food shortage and boom in the price of various metals, minerals and petroleum. This cumulatively impacted negatively on the economies and population of Africa as the continent failed to secure marginal gains from the commodity boom to offset the food shortage. Just as the continent was about to experience a respite from the food shortage the financial crisis set in causing the price of important commodities to collapse.

The extractive sector, in particular mining has been one of the hardest hit sectors, and this has been translated into the loss of government revenue and hundreds of thousands of jobs, but worse the prospect that many manhandled mines will never re-open. The use of derivatives by mine financiers in particular the use by hedge funds of shorting which is betting that the company will fail and sometimes manipulating has contributed immensely to deepen the collapse of the mining sector. Equally important was the artificial inflation of metal commodity prices by traders who bought and sold stocks which were not required to satisfy human need but which resulted in many unnecessary and damaging mining projects. Being financed only to fail when the huge bare market descended on the world in mid-2008

Mineral resources have been important in the social and economic development of many countries in Africa. In the past few years, the price of various minerals has risen dramatically in the world market reaching unprecedented historic high level in the first half of 2008. However there was recognition and consensus that mineral exporting African countries have not derived the required optimum benefits from the increased exports and price boom of various minerals. This recognition resulted in policy reform initiatives by African organizations of civil society, national governments and continental bodies such as the African Union (AU) in collaboration with the United Nations Economic Commission for Africa (ECA). Some countries have already begun to retreat from either proceeding on domestic reforms and or putting on hold implementation of specific fiscal reforms. In addition to their adverse effect, the global economic crises (commodity price collapse and credit squeeze) have the potential of undermining the policy reform processes initiated by governments and civil society, domestic policy autonomy, compliance to environmental, social and human rights standards as well as community concerns. The crises also have the potential of intensifying geo-political hegemony, in particular between the old economic powers in Europe, North America and Australia, and the emerging economic powers in the south (China, India and Brazil).

During the same period negotiation on the Economic Partnership Agreements (EPAs) between Europe on the one hand and Africa and Caribbean Countries on the other hand is still in progress. The Economic Partnership Agreements (EPAs) has been noted by several advocacy groups as one of the areas where the sphere of influence by Europe is clearly manifested. The Cotonou Agreement which was concluded in June 2000, by African, Caribbean and Pacific countries provided for a shift from non reciprocal trade preferences to the Economic Partnership Agreement. The framework of the EPA includes negotiations in Trade in goods, Trade in services, Government procurement, Investment, competition and Intellectual property rights. Europe is negotiating the EPA with five regional blocks of Africa ESA, ECOWAS, CEMAC, EAC and SADC. By its nature and scope, the EPAs which is essentially ‘Free Trade Agreements’ represents a much higher level of liberalization experienced since the launch of Structural Adjustment Programme (SAP) in the 1980s. This is the same period that the international community is engaged in climate negotiation to develop a new framework to replace the Kyoto protocol which expires in 2012. These processes and events not only threaten the marginal economic growth that Africa experienced in the last few years but also have consequences for the negotiating capacity of African governments. This is because the global economic powers who by themselves are hit by the financial crisis would want to seize the opportunity to widen and intensify their control and sphere of influence they have over African political economies.  

Observations

The meeting shared experiences in the light of developments affecting the mining sector and the consequences for community interest, ecological sustainability, gender equity and integrated development. In addition, the meeting discussed a range of issues pertinent to the development of Africa’s mining sector and approaches by citizens to influencing the adoption of frameworks which address the priorities and needs of African people and their economies. These issues include the global economic crises and the impact on on-going policy initiatives, the convergence of opinion regarding the need for policy reforms and the future role of mining in Africa’s political economy.

Since AIMES’s establishment ten years ago, it has addressed specific impacts of the flawed mining regimes that are predominant in Africa. In recent times AIMES has moved to address the problems of mining more systemically and proactively by offering alternative coherent frameworks for the development of Africa’s mining sector. In line with this, the last annual strategy meeting held 2008 developed and adopted a draft coherent alternative regime for mining in Africa with the hope of feeding this into the reform processes at the various levels. The meeting re-examined the draft model regime in the light recent developments affecting the mining sector.


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