- Title: KENYA/FILE: Grassroot activists and charities demand Africa mining tax reforms
- Date: 26th March 2009
- Summary: ASHANTI, GHANA (FILE) (REUTERS) VARIOUS EXTERNAL SHOTS OF ASHANTI GOLDFIELDS CORPORATION VARIOUS OF GOLD SMELTING GOLD BARS KATANGA, DR CONGO (FILE) (REUTERS) VARIOUS EXTERIORS OF COPPER MINING COMPANY VARIOUS OF COPPER MINING VARIOUS EXTERIORS OF COPPER MINING COMPANY
- Embargoed: 10th April 2009 13:00
- Keywords:
- Topics: Domestic Politics
- Reuters ID: LVABXBX6UX89GWUR321XH359QBI9
- Story Text: African governments should publish and review all tax subsidies and concessions given to multinational mining firms to boost resources that could be used for combating poverty, grassroots activists and charities said on Wednesday (March 25).
At the launch of a report commissioned by five grassroots groups and charities working on the continent, representatives of the organisations denounced Africa's mining tax regimes as a mix of secret and discretionary deals that were not in the public interest.
That meant governments had not benefited from the boom in global metals prices over the last few years, and were even worse off after those prices began to plummet last December.
"There have been incidents of corruption and there is a need to stamp out corruption by increasing national oversight as well as international oversight of mining contracts and mining revenues streams. It suggests, in particular, parliamentary approval of oversight of these processes. It also assumes and suggests a more active or pro-active civil society oversight and interest in these matters," Brian Kagoro, ActionAid's pan-African policy manager, told reporters.
The report, "Breaking The Curse", said the secretive way many African governments negotiated contracts with miners -- along with their inability to audit the complex accounts of the firms and their multiple subsidiaries -- were fuelling losses.
The grassroots activists and charities called for all mining development agreements to be made public and to be ratified by members of parliament.
Their report studied the mining sectors of seven African countries: Ghana, Tanzania, Sierra Leone, Zambia, Malawi, South Africa and Democratic Republic of Congo (DRC).
In Ghana gold accounts for 90 percent of exports, but the report said no company had ever paid more than three percent in royalties due to tax allowances and lack of revenue collection skills.
If royalties had been paid at the higher rates allowed by law, that would have earned the West African country several hundred million more dollars over the last few years, the report said.
In Tanzania, the report said, only one mining company -- AngloGold Ashanti -- had paid any corporate income tax by the end of last year, a decade after industrial mining began there.
In DRC, the report said, the government should have earned about 200 million U.S. dollars from the mining sector in 2007. Instead, it said, the authorities reported only 13 million in taxes from miners.
But the grassroot activists and charities recognised the current global economic downturn made renegotiating contracts all the more difficult. Africa should still be wary of scaring off investors, they said.
"This is not about being anti-mining, it is not being anti-market, it is simply saying that the market, like the state, like any other part has to be accountable and responsible, and in terms of how mining revenue has been transacted in Africa, this report demonstrates that there has not been that measure of corporate citizenship that would lead us to believe that these are entirely responsible and accountable, that they are conscious of their obligations for preserving, conserving and protecting the environment, ensuring social and human development and proper sustainable economic development," said Kagoro.
"Our statement here is very simple; people before profit. And we must safeguard that as a sovereign responsibility and right as African peoples, and we are calling upon African governments to ensure that this happens," he added.
Action Aid, Christian Aid, Third World Network Africa, Tax Justice Network Africa and Southern Africa Resource Watch commissioned the study. - Copyright Holder: FILE REUTERS (CAN SELL)
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