News

1) 09.09.2017: Diversification from oil to mining & other sectors: Announcement of UK Trade & Investment Mission to Nigeria

(full text pdf download)

7th – 11th of November 2017

Africa House London, working with the UK Department for International Trade and the Federal Government of Nigeria (FGN) is delighted to announce a Trade and Investment Mission to Nigeria.

We are very pleased to return as guests of the FGN to Abuja and Lagos after our successful visit in February 2016-  in collaboration with the Westminster Africa Business Group (WABG) and supported by the Royal African Society. This mission is accompanied by Helen Grant MP (Minister for Sport and Tourism) and Chi Onwurah MP (Shadow Minister for Innovation). The Prime Minister’s Trade Envoy to Nigeria, John Howell MP will also attend some meetings in Lagos. 

The Federal Government of Nigeria will welcome UK investors and businesses with the AHL Trade Mission to Nigeria. Part of their extensive economic reforms program is to achieve a dynamic economy and improve the lives of ordinary Nigerians. The FGN is working hard to generate a stronger and stable growth rate, by promoting increased production in the non-oil sector of the economy, investing oil revenues in multi-sector economic growth and encouraging diversification. Important aspects of this are:

  • reinforcing the financial sector to improve credit access to the private sector, specifically, small businesses.
  • privatising major public sector entities in oil production and marketing, construction, mining and ports to promote private participation and downstream enterprise development.
  • reduction of government expenditure and involvement in direct economic production through commercialisation, disinvestment and strategic mergers.

Africa House London is offering places to UK businesses on this 2017 Trade Mission to Nigeria. Sectors include: Agriculture, Agro-Produce Manufacturing, Education, Transport, Construction, Security, Information and Communications Technology (ICT), Oil and Gas Services and Mining.

For more information contact:

Martin Brown Industry Liaison and Government Affairs Adviser

+447527449760

info@africahouselondon.com




2) 05.07.2017: Full, updated text of the Sourcebook now available, published by the World Bank

The full, updated text of the Sourcebook is now available, as published by the World Bank.

Please note that the version uploaded as section pdfs to this website, e.g. Chapter 5.3 Policy Priorities, is the interim version of the Sourcebook, superseded by the updated text.




3) 13.06.2017: EI Sourcebook Launch Event - New York City, USA

Dear Colleagues,

The World Bank, the Centre for Energy, Petroleum and Mineral Law and Policy (CEPMLP), the Sustainable Development Solutions Network, and CCSI are pleased to invite you to join a brown bag lunch discussion on June 13 in New York City, USA, about the changes, opportunities and challenges we are most likely to be facing over the coming years with respect to the governance of extractive industries.

Increasing resource dependence over the past decade has taken on new dimensions lately given the changing global context: lower prices than historically averages, intensifying automation, increased transparency around contracts, payments and beneficial ownership, open data movements increasing accessibility to key information, and rising awareness of the necessity to plan for a low carbon economy.

Join four leading practitioners in discussion about how they see the challenges and opportunities shape up, and in particular, how the EI Sourcebook can serve as a tool to strengthen governance in the sector Discussants:

1. Kevin Ramnarine: Strategic Adviser,Distinguished Scholar at the KBH Energy Center, and former Minister of Energy Trinidad and Tobago; 
2. Sonia Balcaza: Consultant Associate at Synergos Consulting Services - former Regional Development Planning Manager at Rio Tinto in Peru; 
3. Professor Peter Cameron, Director of CEPMLP, University of Dundee, UK; and 
4. Michael Stanley Sector Lead, Oil, Gas & Mining, World Bank

The discussion will be webcast.

A light lunch will be served, and a hard copy of the EI Sourcebook will be available on a first-come first serve basis. Please RSVP if you will be joining in Person or Remotely. Room details and Webcast details will be sent to those who RSVP. We look forward to seeing you.

 




4) 30.03.2017: Download your CEPMLP Seminar brochures - CEPMLP @ 40; and CEPMLP Mining Seminar

Seminar brochures for download:

are now live.  

Register for these events now at: 

 




5) 21.03.2017: CEPMLP Mining Seminar & RAW Talks

The Extractive Industries Sourcebook is a partnership between the World Bank Group, a global consortium of universities led by the Centre for Energy, Petroleum, and Mineral Law and Policy (CEPMLP) at the University of Dundeecivil society, and the private sector.

CEPMLP logo          world bank

This year's CEPMLP celebrates its 40th Anniversary, and is hosting a series of extractive industries sector events to mark that major milestone in its development.

First up will be CEPMLP's 15th Mining Seminar - "What Trends in Regulating the Mining Sector? - Sharing Insights from Research and Practice"; this will take place in Dundee, Scotland, on 5th and 6th April 2017.

The seminar will start with a review of the state of the mining industry and will follow with a Roundtable Discussion on the use of State Mining Agreements in the sector. The second day will focus on mining law trends, including trade and export taxes, as well as emerging approaches and tools on environmental regulation, waste and land use planning.

The seminar will also feature a live session by RAW Talks which will provide a range of distinguished speakers and Roundtable participants:

 

 next

CEPMLP would also like to invite you to participate in a two-day seminar on 22nd and 23rd May 2017 which will follow immediately on from the University of Dundee 50th Anniversary celebrations in Dundee, Scotland.

The main theme of the seminar is Global Energy and Resources Transition: Trends, Challenges and Response and is targeted to a broad audience. A range of issues including the rebalancing of oil markets, recent developments in Liquefied Natural Gas markets, renewables and alternative sources of energy, mining and sustainable development will be discussed.

So far confirmed speakers include (in no particular order): Paul Stevens, Paul Griffin, Penelope Warne, Peter Leon, Raphael Heffron and Stéphane Brabant. Attendance is free and further information can be found here.




6) 07.03.2017: Malawi's New Mining Map Cadastre - Landfolio for Natural Resources

Stakeholder Listening Exercise; February/ March 2017; Malawi's New Mining Map Cadastre - Landfolio for Natural Resources 

An article reporting on the introduction of Trimble's Landfolio for Natural Resources (Landfolio) implementation in Malawi has now been published on the UNDP/ World Bank website Sharing in Governance of Extractive Resources (GOXI) is live as today's date, please see link below:

http://goxi.org/profiles/blogs/malawi-s-new-mining-map-cadastre-landfolio-for-natural-resources

The report is based on the following responses, recorded by sector as follows: Government 2; Civil Society: 4; Private Sector 4: Cooperatives Sector: 1; and Media: 1.




7) 14.11.2016: Introducing the doctoral research of Zuhmnan Dapel

“The main challenge of my thesis is in trying to understand why Nigeria’s substantial oil income in recent years has not helped in reducing the incidence of poverty in the country.”

Dapel is a PhD Candidate in the University of Dundee's School of Business.  You can read more about his research via this short paper "Networks of Fiscal-related Corruptiona nd Fraud in Nigeria: the Roles of the Agents Involved" and on the university's website.

 




8) 18.03.2016: Extractive Industries of Tajikistan & Happy Persian New Year! (Nowruz)

Blogpost by EI Source Book's Daniel Gilbert:

Nowruz Mubarak! (for Monday, Mar 21, 2016,).  For the uninitiated, that means Happy Persian New Year (Nowruz)! and this coming Monday is the United Nations-recognised International Day of Nowruz.

It has been far too long since I have spent Spring or Summer in a part of the world where Nowruz is widely celebrated; the Summer of 2010, to be precise, when I was in Dushanbe and the western provinces of Tajikistan.  That trip took me to the grand Nurek Dam, the second tallest man-made dam in the world (apparently, certainly it seemed huge to me), on the Vakhsh River that in turn flows into the Amu Darya (or ancient Oxus river) and all the way to the Aral Sea. 

It is an important part of the world for the extractive industries, e.g. the Tien Shan (“Celestial Mountains”) gold belt in Tajikistan, a country that also boosts reserves of the rare earth element antimony (used in batteries, for instance) and petroleum, and which imports via Uzbekistan huge amounts of bauxite ore used for producing alumina (and thence on to aluminium)  at the vast, and hugely electricity-hungry, Tursunzoda smelter.  

The great 13th Century CE poet Rumi (JalÄ�l ad-DÄ«n Muhammad RÅ«mÄ«) was born in Wakhsh, some say (others say he was born in Balkh) on the banks of the very same, and very similarly-named, river Vakhsh, again in Tajikistan. Many thousands of miles away in Konya, Turkey, he died and that is where his tomb is; it’s a city I visited as a teenager but regret to admit that I can hardly now recall.  Obviously the country names referred to here are modern and identical to those of that time. 

Rumi, one of the great mystic poets and thinkers in Islamic history, wrote the following, nicely upbeat poem for Nowruz, which I am pleased to share with you now.  Nowruz Khojasteh Baad! / Auspicious Nowruz to you all!

May you have the rowdiest Nowruz party,

and may all your problems get resolved

during this upcoming Nowruz.

May you have months filled with joy and laughter,

and a very happy new year.

And may this Nowruz bring you

all the health, joy and happiness.

 

(This blogpost originally appeared on GOXI




9) 21.02.2016: Announcement by CCSI: Translating Gas and LNG into Money

Translating Gas and LNG into Money 
With the new gas discoveries in East Africa and in the Levantine Basin comes the need for countries involved to better understand the gas value chain and how to structure complex and capital intensive Liquefied Natural Gas (LNG) projects for the benefit of the country. Having a fiscal model is key to enable this understanding.

Thomas Mitro of the University of Houston and CCSI have built the first open fiscal LNG model that allows users to test different LNG commercial structures, compare domestic gas use options and assess the impact of various fiscal tools along the gas value chain. A manual has been developed to explain some basic concepts around the LNG value chain and to help using this tool. 

We are hosting a 1.5-hour webinar on March 23rd at 9:30AM Eastern Standard Time (EST) to explain the concepts of the LNG value chain and walk interested users through the model. The explanations and modeling exercise will be done from the host country's perspective. No prior modeling experience is required in order to participate. If interested in joining, please RSVP by March 14th to ccsi@law.columbia.edu




10) 29.01.2016: Pemex joins EI Source Book partner: IPIECA

PEMEX

IPIECA welcomes its newest member, the Mexican oil and gas company - Pemex.

Pemex is the largest company in Mexico and one of the largest in Latin America. It operates through the whole value chain of the industry, from exploration and production to industrial transformation, logistics and marketing.

Pemex has 6 refineries, 8 petrochemical and 9 gas processing plants and generates approximately 2.5 million barrels of oil daily and more than 6 million of cubic feet of natural gas.

IPIECA is the global oil and gas industry association for environmental and social issues. IPIECA is the only global association involving both the upstream and downstream oil and gas industry on environmental and social issues. IPIECA’s membership covers over half of the world’s oil production. IPIECA is the industry’s principal channel of communication with the United Nations. IPIECA resources on the EI Source Book include Human Rights: Promoting a Culture of Respect and Good Practice and the IPIECA Annual Report 2012.




11) 11.12.2015: Adjusting to the Extractive Industries so-called New Normal

How times change.  From the summer of 2002 to that of 2007, Anglo American PLC’s share price marched upwards, with only minor and short-lived reverses, from about £8.36 at the start of August 2002 to £32.22 by June 8th 2007, a rise of nearly 300% in less than five years.  Earlier this month it gained the unwanted notoriety of become the worst performing stock of 2015 on London’s main bourse, the FTSE; currently (10th December 2015) the stock has an opening price of £3.20, that is 90% down from its £32.22 value shown above.  In plumping these depths, Anglo American eclipsed fellow miner (and minerals trading house), Glencore, the share performance of which is nearly equally miserable.

Nor is it just the investors that will be hurt: Anglo American set itself a target of reducing its workforce from the current level of 135,000 to just 50,000; a deep cut by any reckoning.  Whilst workers lose their jobs, mining companies themselves face an uncertain future.  On the 10th December 2015, a Reuters article was provocatively titled: “Diamonds are forever; is Anglo American?”, an article coming just one month after Mining Journal led its November 2015 edition with a report on “Zombie” companies: “Don't mention mining's 'living dead'” of largely mothballed mining companies.  Indeed, mining companies are disappearing off bourse exchanges at an alarming rate, with 25 de-listings from London’s Alternative Investment Market this year, and thirty from 30 from Canada’s TSX Ventures exchange.

Of course, it is the precipitous drop in minerals prices that is behind this carnage.   On April 6th of 2007 (yes, that year again), Nickel broke the price barrier of $50,000 per tonne; as of December 2015 it is now trading at less than $9,000 per tonne, representing a drop of more than 80%.  At the start of February 2011, so considerably more recently, the price of copper exceeded $10,000 per tonne; the current price is some 55% lower than that, a price reduction dwarfed by seabourne iron and metallurgical coal (65% and 70% down from 2011 prices, respectively).  McKinsey, a consultancy, reports that industry-wide revenues down around 6% p.a. over the period 2011-2015, noting (quoted by the Mining Journal, p10, November 2015) that "historically, four years is a long time for average (base metals) prices to decline. In fact, since 1960, the greatest number of consecutive years that prices declined  was five (aluminium and nickel for. 1989 -1993). But this is rare, and has never happened for copper, zinc and lead prices"; until now, that is.

Mining is a cyclical business: high prices attract investment and this carries the seed of a future glut in production; whereas low prices strangle new discovery and lead, long term, to future shortages.  The source quoted above for Anglo American’s unwanted eclipse of Glencore as bottom FTSE performer year-to-date 2015 is the Daily Telegraph, and I turn to that same newspaper again for an article published in the heady days of April 2007, headlined “Nickel price 'loses touch with industrial reality'” 

which reported that “China's top nickel producer, Jinchuan Group, warned that the price had lost touch with industrial reality, setting off a wave of "irrational investment" in new mines that would send prices crashing once the bubble burst. ‘The trend has gone like a raging fire into madness. We are in deep anxiety about at the potential ill consequences,’ it said.”  Which is, of course, exactly what happened.

Anglo American’s intended 63% headcount reduction is consistent with the view of low mineral prices being the “new normal” for quite a time yet, particularly given the expense of making so many redundancies.  This parallels the situation in the petroleum sector, where the 2014-5 price collapse was initially met with short-lived opportunism, now long gone, that prices would quickly recover, credence in which led to some oil companies holding (at great expense) crude oil tonnage at sea in (relatively) stationary oil tankers rather than bringing them into port.

One online resource that has long championed the cyclicality of the fortunes of the mining sector, and the volatility in price that has long characterized benchmark crude oil markets, is the Extractive Industries Source Book. This fact does not mask the fact that much of its material dates from the peak of the last mining cycle or in the immediate years of declining prices.  It is not just mining prices that run in cycles, but also grant-aid funding, and we are delighted that the project has secured the necessary funds for a revamp – thanks are rightly due to the World Bank for this opportunity.

We are therefore pleased to announce that work is now being developed: to make the website more responsive in the way it displays on mobile devices; to update the online content; to align the website better to external content, e.g. the vast petroleum contracts repository amassed by project partner OpenOil; to replace all of the main Chapters content with new text; and to undertake a survey of users to inform and shape all of the above.  Not to mention hard copy publication of the actual Extractive Industries Source Book by the World Bank, which text has undergone rigorous revision through an exacting and exhaustive process of peer review.

Times have indeed changed; it is time that the Extractive Industries Source Book does too.  We will keep you posted with developments, but to confirm that the project will remain entirely free to access, free of adverts, and free of registration. The purpose of the project remains to inform and educate its users with the critical understanding needed to make sense of the highly contested concepts of, contrastingly and by way of example, “extractives for development”, “resource corridors”, and the “resource curse”, so that they, as public policy makers and implementers, representatives of civil society, and industry participants, can make informed choices for the benefit of themselves, those they represent and serve, and for future generations.

Daniel Gilbert, EISB Team, Dundee, UK.

NB: this article is cross-posted to GOXI, partner website to the Extractive Industries Source Book, for maximum reach.




12) 06.11.2015: What has Philosopher Theodore Zeldin got to do with public interest financial modeling in the extractives sector?

Twenty years before I got into the world of extractive industries governance I studied Economics at university (Edinburgh, UK).  Albeit not for very long: my Masters was in Politics, Philosophy and Economics (PPE) and I decided to major in Politics, so that amounted to four years of study, rather than the other ‘P’ or the ‘E’, which only got two years of study (all concurrently).  And, yes, I am that old. 

I mention this both in the context of the economic modeling of petroleum and mining projects, as pioneered by OpenOil (a leading and global consultancy for this particular niche), and one of the philosophers (the “other ‘P’” referred to above) I read during my four, wonderfully enjoyable, Edinburgh years.  The philosopher in question is the wonderfully named Theodore Zeldin a former dean of St Anthony's College, Oxford University (UK); here is an equally wonderful photo of him – plus more biographical information on the gentleman. 

Zeldin, wrote (page 53, 2007, cost: £0.28p+):

“Work increasingly consists of talk..  But the more we talk, there less there is we can talk about with confidence..  We have nearly all of us become experts, sepcialised in one activity..”

I want to tell you about an opportunity for other users of the EI Source Book to jump in the deep end of something that may (or may not) be new to them, to learn to talk about this new (if it is so) topic with confidence too, alongside whatever legal, geological, engineering, management or leadership etc. topics you can already talk about with confidence.  To reverse the above equation, such that, collectively, “the more we talk, the more we can talk about with confidence”; the opportunity in question goes by the name of the public interest financial modeling paradigm (catchy, no?) developed by OpenOil, see above.  But first, more Zeldin (ibid., p.53):

 “An economist openly admits that ‘Learning to be an economist is like learning a foreign language, in which you talk about a rational world which exists only in theory’”.

Well, whilst there is more to economics than just “talk”, I can attest that there is plenty of that too, and that sometimes the talking seemed to me to be in Ancient Hunnic, or something.  Of course, there are also numbers.  And equations.  And statistical tests.. in fact, plenty of all these things too.  And such things are also well represented in the modeling paradigm in question, as is talk, in the form of clear communication about what the models are telling us, their assumptions and particular sociopolitical contexts, their sources and their results.

What we want to do (I am very pleased to be assisting OpenOil on this project) is to open up a conversation about our public interest financial modeling paradigm.  We are not talking a lecture series, but a genuine set of online conversations taking place through Google Hangouts and supported by documentation.  It is entirely free to join, but places will be strictly limited.

Zeldin also said (link to http://www.gurteen.com/gurteen/gurteen.nsf/id/when-minds-meet) “Conversation is a meeting of minds with different memories and habits,  When minds meet, they don't just exchange facts: they transform them, reshape them, draw different implications from them, and engage in new trains of thought. Conversation doesn't just reshuffle the cards: it creates new cards’.  It is that philosophy that we want to take forward through the Google Hangouts.

It’s probably time for some specifics.  Here goes: beginning on Friday November 13th (why not?), there will be five weekly Google Hangouts which walk through models of a mining and an oil project, adapted for training purposes to teach the basics of project economics, supply and demand curves, investor metrics such as Net Present Value and Internal Rate of Return and discount rates. Each 90-minute session will build on the last and work against presentation materials and exercises provided online. Participants are encouraged to devote 2-3 hours a week between sessions to the exercises and materials, and post questions, and answers, on message boards. For more information, please drop me, Daniel Gilbert, an email.

Does this sound like something for you?  If so, please do sign-up.

The sessions will be led by Alistair Watson, who developed the Fiscal Analysis of Resources Industries modelling too for the International Monetary Fund and has modelled for governments, industry and civil society for 20 years. They explore the public interest financial modelling paradigm developed by OpenOil, and will also discuss full project models already published on the Internet of oil projects in Chad (extractives company: Glencore), Afghanistan (CNPC) and the Bulyanhulu gold mine in Tanzania (Acacia Resources). 

Each Friday for five weeks (14:00 UK time, 15:00 CET, 9:00 EST), Alistair, together with OpenOil director Johnny West, will lead a 90-minute video presentation of modules in the training course and answer questions.  By the way, it's also entirely free.

NB: we may need to restrict numbers to create a viable learning environment. Applicants will be informed by Tuesday November 10 of if a place is available on the first course. Familiarity with Excel is necessary. Priority on the first course will be given to applicants from extractives dependent economies. A French-language version of the same online training will be offered in January 2016.

Let the conversations begin!  Including here...

NB: the above post was first made to the GOXI website.




13) 25.02.2015: Somali webpages of the EI Source Book updated

The EI Source Book team would like to thank CEPMLP MSc alumnus Stuart Wilkinson for his work in providing materials to update the Somali webpages of the site, e.g. that for Oil and Gas and for Mining.

 




14) 01.03.2014: 18 New Documents Uploaded to EI Source Book

New African-countries specific documents as follows:


New (un)conventional petroleum documents as follows:


Children's rights and extractives subject area now properly represented, as follows:


Recent uploads relating to Resource Curse issues:


New mining guide:


Sustainability subject areas new documents:






15) 24.01.2014: Gelb Warns Canada that Careful Management of Resource Wealth Needed

Natural resources can be a curse or a blessing for countries. Resources mean revenue, but can also create dependency, lack of diversification, large currency swings, and costly economic and political instability.  The lesson for Canada, delivered at a press conference in Ottawa on the 20.1.14 by renowned economist Alan Gelb, is that Canada needs to manage our spending to avoid "Dutch disease" and manage its politics to avoid dependency on resource revenues.  

In a report published earlier this month by EI Source Book partner The School of Public Policy, Gelb argues that the prosperity of a resource-rich nation hinges on the management of its resources and warns that countries like Canada must avoid becoming complacent in terms of resource management.

“Even once reasonably democratic and accountable countries, such as Venezuela, have been caught unprepared on the dangerous double edge of a resource boom and have seen their governance systems substantially eroded,” Gelb writes. “Developing the fiscal capacity to withstand commodity-market shocks, creating effective and durable checks and balances on systems of legislative power, enforcing transparency in budgeting and public-investment management, and maximizing tax efficiencies and tax administration, are all areas where Canadians can and should focus their efforts.”

Building fiscal capacity to withstand commodity-market shocks is an area that Gelb provides particular emphasis. Gelb indicates that countries are prone to higher public spending when resource prices are high, but this temptation is something that should be resisted. Instead, he argues, it is critical to create savings buffers in order to absorb inevitable price shocks.

“This may be especially important for provinces like Alberta with high-cost resources such as oil sands, because rent margins will be even more volatile than prices,” Gelb writes.

The EI Source Book team is very grateful to Gelb for the extensive peer review work that he has contributed to both Chapter 7 and Chapter 8 of the EI Source Book.




16) 06.01.2014: Seven new uploads to EI Source Book project website

The EI Source Book team is pleased to report on the latest 7 uploads to the website, as follows:

1) CEPMLP Reference Collection Archive Arctic Oil and Gas Development: A Trajectory to Ecological Ruin (CEPMLP Annual Review)
2) Tanzania Natural Gas Policy 2013              
3) Namibia Conference Brochure
4) Malawi Tanzania - Lake Malawi dispute         
5) Kazakhstan Law on Investments
6) Liberian Petroleum Exploration & Production Act 2013          
7) Mineral Royalties & Other Mining-Specific Taxes - IM4DC partner publication




17) 31.12.2013: Paul Collier, CBE

Announcement:

"I would like to take this opportunity to publically congratulate Paul Collier on his very well merited award of a CBE in the New Year's Honours List, 2014, for services to research and policy in Africa", Professor Cameron, Director of the EI Source Book.




18) 27.11.2013: Dundee - Malawi Partnership Deepened Further through Specialist Seminars

This week, the University of Dundee's Centre for Energy, Petroleum and Mineral Law and Policy (CEPMLP) is hosting a government delegation from Malawi. The group of nine Malawian civil servants is being funded by the World Bank through the Malawi Mining Governance and Growth Support Project, which was approved in March 2011 and launched in January this year.

This is evidence of the ongoing relationship between the Centre and the Government of Malawi.  The Director of the Centre and of the EI Source Book project, Professor Peter Cameron, is currently providing technical assistance to the government as it develops a new Malawi Mines and Minerals Act. The current one dates back to 1981. In addition, Malawi's Principal Secretary of the Ministry of Mining, Dr Leonard Kalindekafe, completed his doctoral studies with the Centre.

The delegation of Malawians from the Reserve Bank of Malawi, Ministry of Mining, Ministry of Justice, Ministry of Economic Planning and Development and the Ministry of Finance are taking part in "valuable, broad ranging, constructive, internationally-focussed seminars in Dundee, in partnership with and led by CEPMLP", according to Daniel Gilbert, who presented to the group on the EI Source Book project on Wednesday. Charles Kaphwiyo, Director of Mines at the Ministry of Mines, and Jalf Salima, Deputy Director of the Geological Survey Department are among the delegation.

The group will participate in sessions on sustainable development and community benefit sharing, public-private partnerships, foreign investment vehicles. Dr Ivor Roberts, Executive Director of Minerals Titles Division, Western Australia Department of Mines and Petroleum, and CEPMLP honorary professor Philip Crowson, who worked with Rio Tinto from 1971 and 1997 and became Chief Economist in 1981, will be sharing their insight with the group.

This week, the University of Dundee's Centre for Energy, Petroleum and Mineral Law and Policy (CEPMLP) is hosting a government delegation from Malawi. The group of nine Malawian civil servants is being funded by the World Bank through the Malawi Mining Governance and Growth Support Project, which was approved in March 2011 and launched in January this year.

This is evidence of the ongoing relationship between the Centre and the Government of Malawi.  The Director of the Centre and of the EI Source Book project, Professor Peter Cameron, is currently providing technical assistance to the government as it develops a new Malawi Mines and Minerals Act. The current one dates back to 1981. In addition, Malawi's Principal Secretary of the Ministry of Mining, Dr Leonard Kalindekafe, completed his doctoral studies with the Centre.

The delegation of Malawians from the Reserve Bank of Malawi, Ministry of Mining, Ministry of Justice, Ministry of Economic Planning and Development and the Ministry of Finance are taking part in "valuable, broad ranging, constructive, internationally-focussed seminars in Dundee, in partnership with and led by CEPMLP", according to Daniel Gilbert, who presented to the group on the EI Source Book project on Wednesday. Charles Kaphwiyo, Director of Mines at the Ministry of Mines, and Jalf Salima, Deputy Director of the Geological Survey Department are among the delegation.

The group will participate in sessions on sustainable development and community benefit sharing, public-private partnerships, foreign investment vehicles. Dr Ivor Roberts, Executive Director of Minerals Titles Division, Western Australia Department of Mines and Petroleum, and CEPMLP honorary professor Philip Crowson, who worked with Rio Tinto from 1971 and 1997 and became Chief Economist in 1981, will be sharing their insight with the group.

For those readers who are following the ongoing border wrangle between Malawi and Tanzania: This month, Gilbert also gave a presentation (available online) at CEPMLP on international customary law and colonial bilateral treaties with a focus on the ongoing dispute between Malawi and Tanzania.






19) 01.11.2013: Peter Leon on RSA Protection and Promotion of Investment Bill 2013

Peter Leon: "Elimination of international arbitration for investment disputes does not follow best practice (and the) implication (of the new Bill) is that (compensation for expropriation) would be below market value as South Africa Consitution uses 'just and equitable' test with discount factors".




20) 06.09.2013: Date & Time of first UK EITI civil society meeting confirmed

To all those who have responded via Doodle poll and otherwise.

This is to confirm that the first UK EITI civil society meeting will take place on Friday 13 Sept from 11.00 to 12.30 at Global Witness, 6th Floor, Buchanan House, 30 Holborn, London EC1N 2HS (nearest tube Chancery Lane). Many thanks to Brendan and Barnaby at GW for hosting us.

Thanks for expressing interest, and apologies that we cannot suit everybody re date and time. Friday 13th AM is by far the date and time that work for most people.

Proposed agenda:

1. Brief introductions (15 min)
2. Priorities for what we want the UK EITI to achieve (25 min)
2. Who will represent UK civil society on the MSG (25 min)
3. Process for UK civil society MSG reps to be accountable to wider UK civil society on an ongoing basis (25 min)

Please let me know if you will need to participate by phone. Call in details are: Local access 0844 338 7415, Conference code: 3973557907#

I propose that all those included in this email – whether they participate in the meeting or not - become the initial civil society reference group for the UK EITI process (see agenda point 3). If you can’t attend or call in but have issues to communicate to the meeting please send me a short email – bullet points only please! – noting those issues. Currently I work only half a day a week on the UK EITI.

Looking forward to the meeting.

Please advise Miles ahead of time by email if you wish to attend.



Thanks

Miles Litvinoff
Coordinator | Publish What You Pay UK
mlitvinoff@pwypuk.org
www.publishwhatyoupay.org
t: +44 (0)20 8965 9682
m: +44 (0)7984 720103




21) 02.09.2013: 1st UK Extractive Industries Transparency Initiative (EITI) Multi-Stakeholder Group meeting

Open Inviation to UK Civil Society:

You are invited to participate in a civil society meeting in the week of 9 or 16 September, in advance of the first UK Extractive Industries Transparency Initiative (EITI) Multi-Stakeholder Group meeting, set by BIS for 9 October.
The UK EITI process will, I hope, contribute to:
- achievement of a global extractive industry financial transparency standard
- development of best practice and innovation in EITI implementation
- encouraging the UK government to commit to a public registry of beneficial ownership and to further support contract transparency
- facilitating dialogue with govt and industry about the UK’s oil, gas and mineral resources, the tax regime/incentives and revenue management
There may be opportunities to discuss the UK’s overall energy policy.
The 9 October MSG meeting will bring together 4 representatives each from civil society, government and industry. BIS hopes to develop MSG TOR similar to the current Australian pilot EITI model, although for the UK this is not a pilot but full implementation of the new EITI Standard.
As I see it, the purpose of the civil society meeting this month is:
- to discuss and ideally agree priorities for what we want the UK EITI to achieve
- to agree who will represent UK civil society on the MSG
- to agree a process for UK civil society MSG reps to be accountable to wider UK civil society on an ongoing basis
The meeting will take place on either 12, 13, 17, 18 or 19 September at Global Witness’s London office (Holborn). Please use the doodle poll at http://doodle.com/9mtne8g74h8k7pd3 to indicate availability if interested.
For people wishing to participate by phone, I’ll be able to provide a conference call number shortly. Please let me know if you plan to dial in.
Please also feel free to forward this invitation to others in civil society (beyond Publish What You Pay, the UK OGP civil society network and London Mining Network - who have already been informed).

Many thanks
Miles Litvinoff
Coordinator | Publish What You Pay UK
mlitvinoff@pwypuk.org
www.publishwhatyoupay.org
t: +44 (0)20 8965 9682
m: +44 (0)7984 720103




22) 12.08.2013: Ten Minutes for Extractives in South Sudan

Press release from Cordaid:

"Cordaid and EI Source Book partner OpenOil are publishing a series of policy briefs about the oil, gas and mining industries of South Sudan, Colombia, the DR Congo, Guatemala and Nigeria. The briefs are written for the people directly involved and aim to improve the quality of the public debate about the industries. The first brief on South Sudan is now available.

By informing people in these five countries we hope to give them a broader understanding of how the industry works and who exactly is involved. How, for example, the theft of oil has spurred development of a vast parallel economy in Nigeria. Or details of the confrontation between indigenous peoples and international mining companies in Guatemala.

As more information on the extractives industries makes it into the public domain, understanding of the situation will improve. Public suspicion of the extractives industries remains high around the world, largely because of their secrecy. so these briefings include maps, graphs and data-driven visualisations to draw connections between local geography and national political economy.

No matter where you are, you can only take action if you are informed. It is our belief that, with better access to information, a real, mature and informed public discussion can start to take place.

Read the policy brief on South Sudan."




23) 03.07.2013: Community Research Methods for the Resources Sector

CSRMThe Centre for Social Responsibility in Mining (CSRM) is part of the Sustainable Minerals Institute (SMI) at the University of Queensland.

The Source Book is proud to announce the following CSRM event.

Masterclass in Community Research Methods for the Resources Sector: Brochure; & Online Registration.

Date: Monday, 26 August 2013 - Thursday, 29 August 2013
Location: SMI - University of Queensland, Australia; Level 4, Sir James Foots Building (47A) (St Lucia).

In August, CSRM will be conducting a four day Masterclass on Community Research Methods for the Resources Sector. Designed as a core component of the UQ/MCA Diploma and Masters Program in Community Relations (Resources Sector), CSRM is making the intensive session available to external participants who are not currently enrolled in the postgraduate program as a professional development opportunity.

Participants will hear of recent developments in researching and understanding community issues associated with resource developments from leading researchers and industry experts.

The Masterclass is primarily designed for community relations practitioners, in industry, government and civil society, working in both minesite and corporate environments, who have responsibility for or who are involved in processes of researching community issues, and evaluating and monitoring the social impacts of mining developments/




24) 25.06.2013: Happy Birthday Mozambique - personal reflections of EI Source Book's Daniel Gilbert

As I write this, today (Tuesday 25th June 2013) is Mozambique’s Independence Day, and its 38th Birthday as an independent nation.   Happy Birthday Mozambique.

My first awareness of this country was as a school child – Hugh, one of my “best friends” (kids have  many friends who all, somehow, are their “best friend”, as any parent will attest) was from Mozambique.   Hugh’s dad worked for Lonhro managing a big estate farm and he was sent to Bedales School, Hampshire, England – where I also studied, if that is the right word – for his education. 

This was in the late 1980s and early 1990s, well into that country’s civil war, which had started in 1977, and just before the ceasefire of 1992.  I well remember Hugh saying that his locality had its own militia to defend inhabitants from both (FRELIMO) government and (RENAMO) rebel sides in that bloody and unrelenting conflict.

This was all brought to mind not just by today’s Independence celebrations but by my sudden and chance awareness that Lonmin, the mining company caught up in the infamous, South African, Marikana wildcat miners' strike of August, 2012, in which over 100 striking Lonmin employees were shot (36 killed, 78 wounded) by South African Police Service officers.

It turns out that Lonmin used to be called, from 1998 until May 2007, Lonrho Africa plc previous to which it was part of the same Lonhro company that Hugh’s dad worked for.  Somehow, this brought the whole Marikana incident closer to home to me, although it was very fresh to me at the time and the subject of heartfelt protest video uploaded to the website I work on, video filmed by my colleague and project Director Prof. Peter Cameron at last year’s Mining Indaba in South Africa.  

The project in question is the free to access oil, gas and mining information website, the EI Source Book, whcih offers dedicated Mozambique webpages including those relating to specific aspects of the extractive industries in that nation.

Mozambique has enjoyed peace since 1992 and has made remarkable progress in terms of economic and social development, and political stability.  FRELIMO and RENAMO tensions still remain: Reuters reported that, on the 19th June, ‘The Renamo opposition party, a former guerrilla organisation, threatened on Wednesday to paralyse the only railway line out of Mozambique's vast coalfields in an effort to hurt the government. Renamo information chief Jeronimo Malagueta told a news conference in Maputo that disruption of the Sena line connecting the northwest region of Tete to the Indian Ocean port of Beira would last "as long as it takes". Renamo would "paralyse the movement of trains", he added. "From Thursday June 20 we will take action to make the logistics of the country fragile," he said, without providing details. The line is used predominantly by Brazil's Vale and London-listed Rio Tinto.’

Again, this came as a shock to me – perhaps it should not have done so, but there you are – that these old civil war combatants were still sparring, albeit not with the violence, or at least the extreme violence, of the 1977 to 1992.   

On the positive side – and it is very much a pleasure to report – Mozambique is one of the world’s fastest growing economies, despite the impact of natural disasters including both flooding (e.g. 2000 and 2001) and drought (e.g. 2002), with extractive industries such as coal, titanium, oil and gas all flourishing. 

Moreover, the curse of non-transparency seems to have passed Mozambique by, at least in comparative terms, meaning that this resource wealth is more likely to generate long term benefits to the nation’s economy and people – a lack of transparency in extractives reporting is a cover, in very many countries, for the creaming off of profits due to the nation’s public budget into the hands of a few ‘insider’ individuals through back-handers and off-the-record transactions.  
Instead, and in contrast, Mozambique is an Extractive Industries Transparency Initiative (EITI – a Source Book partner) compliant country; http://eiti.org/Mozambique .  On the page dealing with implementation, EITI reports that “Mozambique launched its third EITI Report (covering 2010) on 26 December 2012 revealing that the government received a total of just under US$65 million from their extractives sector in 2010 of which 70 per cent was from hydrocarbons. This up from the US$40 million the government received from their extractives sector in 2009. There was an 80 per cent increase in revenue from hydrocarbons. There was less than 1 per cent discrepancy between what the government said that they received and companies said that they had paid” (my emphasis), a very notable achievement.

Overall, I think that there are good reasons to feel positive about Mozambique’s future.  Happy Birthday Mozambique, and may you prosper greatly in the future for the benefit of all of your citizens.




25) 18.06.2013: Scottish Energy Minister introduced to EI Source Book project

Fergus Ewing MSP - Scottish Government Minister for Energy, Enterprise and Tourism was personally introduced to the EI Source Book project by its Knowledge Exchange Coordinator, Daniel Gilbert, on the 12th June 2013 in Manchester, England.  The below image shows: the Minister (left); Derrick Lang, Manager of Dundee Airport (centre); and Daniel Gilbert (right).

Fergus Ewing MSP Energy Minister  and 2 others in Manchester




26) 14.06.2013: ICMM President Welcomes new Commitment to Canadian Mining & Energy Reporting Standards

Tony Hodge, President of the International of the Council on Mining and Metal(ICMM), has strongly welcomed the prospect of enhanced mining and energy reporting standards which should soon be incumbent on Canadian companies.  Such standards follow the lead of the EU and USA and would relate to financial sums paid to foreign states, including those accruing from taxes and royalties.

Canada's Prime Minister Stephen Harper announced this move, stating that Canada’s “participation will help transform the way industry reports payments worldwide,” 

“This is a really important step forward, ... this is going to lead to better information” said Tony Hodge, who was among the business people who met with Mr Harper on Wednesday 12th June 2013, the day of the Canadian announcement.   Tony Hodge also recognised the wisdom of Mr Harper working with Canadian federal provinces closely on this issue.




27) 03.06.2013: Margaret Thatcher and the fortunes of the UK's coal sector

Much has been written since her death on April 8th 2013 about Margaret Thatcher and the UK Coal Industry. Many commentators have ascribed its decline and subsequent near-extinction to her government’s defeat of the miners’ strike in 1984-85. Undoubtedly that was a major landmark of her premiership, but it was only one factor among many in the coal industry’s demise.

The industry had been in long-term decline for decades. Post–war output had peaked at 230 million tonnes in 1954, when there were well over 800 collieries operating  and employment in the industry was about 0.7 million. By 1979, when Margaret Thatcher took office, the number of collieries had fallen by over 75%, employment had dropped by two thirds and output had nearly halved. Clean air legislation, the development of nuclear power and intensifying competition from oil and gas had massacred coal’s markets outside the electrical generating industry. The latter’s share of domestic steam coal supplies had increased from some 28% in 1960 to 68% in 1979. The decline inUKcoal output occurred despite restrictions on imports from the late 1950s, the imposition of taxes on fuel and heating oils in 1961, and governmental pressures on the state-owned electricity generators to burn coal.

The figure shows UK coal production and domestic supplies from 1960 onwards.

UK coal production and total domestic supplies 1960-2011 (million tonnes)

 UK coal mining

Source: International Energy Agency (2012): Coal Information (Edition: 2012).  ESDS International, Universityof Manchester.  DOI: http://dx.doi.org/10.5257/iea/coal/2012

In the short-term the 1984-85 strike had but a temporary effect on coal output. It dropped from 116 million tonnes in 1983 to 40 million tonnes in 1984, but climbed over 100 million tonnes in 1986-89.  Production then trended downwards, but until 1992-94 nowhere near as rapidly as in the 1960s and early 1970s. It was then hit by the impact of 1990’s privatization of electricity supply. Initially the generating companies were held to joint undertakings to purchase agreed quantities of British coal until early 1993. When these lapsed subsequent purchase contracts were for much smaller volumes, and the generators switched to alternative fuels, and notably to gas. They also imported larger tonnages of cheaper coal from overseas. UK coal production had fallen to roughly 50 million tonnes when it was privatized at the end of 1994.

The main impact of the 1984-5’s defeat of the National Union of Mineworkers was in paving the way for a more rapid closure of loss-making deep mines and increases in labour productivity. The number of working collieries fell from 211 in 1980 to 133 in 1985 and 65 in the 1990-95 period. Employment shrank from 230,000 in 1980 to 138,000 in 1985 and 57,000 in 1990. By 1995 it had slumped to 15,000. The corollary was a substantial six fold increase in the industry’s output per man between 1980 and 1995. Following privatization the industry has contracted still further. Only a handful of mines, employing 6,000 workers, were still operating in 2012 to produce almost 18 million tonnes per year out of total supplies of 51 million tonnes. British deep coal mines are unable to compete with lower cost overseas producers and with alternative fuels in an unprotected market.

Other European countries have also witnessed a rundown of domestic deep-mined coal production in the face of the same competitive pressures as theUKindustry. Britainfaced a much sharper contraction, and within a much shorter period, than other countries. This undoubtedly caused severe and continuing hardship for the workers and communities affected. The attitudes and policies of Margaret Thatcher’s governments were in that regard at least partially to blame. Even without the benefit of hindsight some of the adverse consequences could have been avoided, or at least mitigated, with more sympathetic advance planning and management.

The entire focus of UK government policy was on liberalizing markets and on deregulation, as epitomized in the wave of privatizations, rather than on shoring up declining industries. Just as Britain’s example of nationalizing the economy’s commanding heights in the 1940s had influenced policies throughout the world, and especially in its former colonies, so its privatizations of the 1980s and 1990s spearheaded similar policies overseas. Margaret Thatcher’s governments in a real sense captured the zeitgeist of the age and set an example for others to follow. She dared where others may have been more cautious, and it was that daring rather than her successful defeat of a strong coal mining union that was her main contribution to the mining industry. In the UK privatization first of state-owned  electricity generation and then of coal, accelerated the rundown of the UK coal industry, but elsewhere privatization, and the accompanying liberalization, provided a strong impetus to increased output and employment in a wide range of mining projects throughout the world.

Opinion piece by Professor Phillip Charles Francis Crowson; BA, MA, Honorary Professor and member of both CEPMLP's Global Faculty and External Consultants teams.  




28) 28.05.2013: Transparency Standard Raises the Bar, Requires 39 Countries to Release Data on Individual Oil, Gas and Mining Licenses; US, UK and France Joining Those Subject to New Rules

EI Source Book partner press release - Revenue Watch Institute: May 22, 2013, Sydney—The Extractive Industries Transparency Initiative (EITI) (also a partner on the EI Source Book) has approved a revised standard of performance requiring its 39 implementing countries to release wide-ranging new information about their oil, gas and mining industries.

Rather than merely disclosing revenue data, countries will now need to release information about production volumes, the companies holding licenses, license allocations, state-owned companies, corporate social responsibility payments and transfers from central to local governments to be considered in line with the EITI Standard.

“The EITI has finally recognized that, when it comes to complex industries, merely disclosing payments is not enough,” said Daniel Kaufmann, President of the Revenue Watch Institute.  “By including contracts and licenses, beneficial ownership, state-owned companies and production information, the new Standard could make EITI more effective in addressing the vast governance challenges facing resource-rich countries.”

Created in 2003, EITI previously required governments and companies to disclose payments deriving from oil, gas and mining activities. A body that includes government, company and civil society members must oversee the reporting process. To date, 39 governments have volunteered to participate in EITI, and 23 have achieved “EITI compliant” status. The United Kingdom and France announced today their intention to implement EITI, joining the United States, which made a commitment in 2011.

The new EITI Standard announced today results from over a year of negotiations between the governments, companies and non-governmental groups on the initiative’s International Board.

EITI countries will now have to provide detailed information about each oil, gas and mining license. First, they will need to maintain a public register that lists the company name, location and duration of each license, information currently missing in major producers like Kazakhstan and emerging producers like Mozambique. EITI reports will contain an explanation of how licenses were awarded or transferred during the year covered, and details on applicants and criteria used in any license auctions.

EITI now requires reporting of revenue data by each project, bringing EITI in line with this spreading international standard. The U.S. Securities and Exchange Commission requires project-level reporting by all U.S.-listed oil, gas and mining companies, and the European Union has committed to the same. By changing its rules, EITI keeps pace with this important development.

The new Standard asks for considerably more information from state-owned companies, including major industry players in nations like Azerbaijan, Iraq, Nigeria and the Democratic Republic of Congo.  When selling the state’s share of production, national oil companies will have to disclose the volumes sold and revenues received—an opaque area in many countries. Reporting on quasi-fiscal expenditures, the sale of state-owned assets and financial transfers with the state is also required.

EITI will now also include production data. EITI Reports will have to disclose total production volumes and the value of production by commodity, including by state and region when relevant, as well as total export volumes and the value of exports by commodity.

Finally, the new Standard encourages countries to act in two additional areas of transparency–the disclosure of contracts and beneficial ownership information. In the coming months, the multi-stakeholder group that oversees EITI country implementation will have to determine whether to include this information in their EITI process. Contracts determine the benefits the public receives for their sub-soil assets, and beneficial ownership disclosure reveals when licenses are allocated to politically  connected persons.

“The new Standard has opened the door for EITI to become much more relevant to meaningful policy reforms to improve resource governance,” said Erica Westenberg, EITI Policy Officer at Revenue Watch. “The challenge now is for the 39 countries to implement the Standard in a timely and thorough way.”




29) 15.05.2013: Announced: fourth Tanzania Offshore and North Lake Tanganyika Licensing Round

Announced: the 4th Tanzania Offshore and North Lake Tanganyika Licensing Round

The bidding round will be closed on Thursday 15th May 2014 The Government of the United Republic of Tanzania through Tanzania Petroleum Development Corporation (TPDC) is pleased to announce the 4th Tanzania Deep Offshore and North Lake Tanganyika Licensing Round. The 4th Tanzania Offshore Licensing Round that was delayed in September 2012 will now be launched on 25th October 2013 during the 2nd Tanzania Oil and Gas Conference and Exhibition that will be held from 23rd to 25th October 2013. The Conference will take place at the Mwalimu Nyerere International Conference Centre located in the city of Dar es Salaam, Tanzania.

The bid round will be closed on Thursday 15th May 2014 in Dar es Salaam. The 4th Tanzania Deep Offshore and North Lake Tanganyika Licensing Round 2013 include the deep offshore sedimentary basins comprising of seven (7) Deepsea Blocks (each of average size of 3000sq. km Blk4/2A, Blk4/3A, Blk4/3B, Blk4/4A, Blk4/4B, Blk4/5A, Blk4/5B) that are located between 2000m to 3000m of water depths from 40°30’E to 41°40’E and 7°30’S to 9°00’S and North Lake Tanganyika block located offshore in the western arm of the East African Rift System.

The two Deep offshore Blocks 4/1B and 4/1C are reserved for Government where TPDC will be allowed to execute a different exploration approach using a strategic partner to be competitively sourced. The Deep offshore blocks have good coverage of modern regional 2D seismic data which can be viewed at ION GX Technology of Houston, Texas and WesternGeco of UK. Lake Tanganyika is the world's longest (650 kilometers) and second-deepest (1,500 meters) is covered by sparse 2D seismic data which were collected in the 1980s during the African Lakes Drilling Project. The data and copy of report is available at TPDC.

For any further details and clarifications, please contact:

Managing Director Tanzania Petroleum Development Corporation BWM Pension Tower A Building Plot 51/52 Azikiwe/Jamhuri Street P.O. Box 2774 Dar es Salaam Tanzania Phone: +255 22 2200103/4, 2200112 Fax: +255 22 2200113

Contact: Dr. Emma Msaky E-mail: tpdcmd@tpdc-tz.com ION GX TECHNOLOGY CORPORATION 2105 City West Boulevard, Suite 900, Houston, Texas 77042, U.S.A., OR ION EAME GX TECHNOLOGY 1st Floor, Integra House, Vicarage Road Egham, Surrey TW20 9JZ

Contact: Nick Blake Phone: +44 773 4415105 E-mail: nick.blake@iongeo.com WesternGeco Schlumberger House, Buckingham Gate London Gatwick Airport RH6 0NZ Gatwick, West Sussex GEO: 51.157644, -0.151070

Contact: Dave Baker Tel: +44 1293 556480 Fax: +44 1293 556300 E-mail: dave.baker@westerngeco.com




30) 02.05.2013: No Country is an Energy Island: Securing Investment for the EU’s Future

The Director of the EI Source Book, Professor Peter Cameron, has been publically recognized for his substantial contribution to the official United Kingdom (UK) House of Lords European Union (EU) Committee’s Inquiry into EU Energy Policy.   The report and the evidence volume (which contains both the oral and written evidence received), has now been published by the UK parliament:  “No Country is an Energy Island: Securing Investment for the EU’s Future”; 14th Report of Session 2012-13; HL Paper 161.

Professor Cameron’s evidence is to be found at pages 47 to 57 of the following document: “EU energy: decarbonisation and economic competitiveness; Oral and written evidence

A key finding of the inquiry was that more of the funds held by institutional investors would be invested in energy projects if there was a clear EU policy about how to deliver secure, affordable and low carbon energy.

An extensive array of resources relating to this inquiry have been collated on the UK parliament’s website.  The UK has a bicameral parliamentary system: the House of Lords is the upper house of parliament, alongside the lower house of parliament, the House of Commons.




31) 26.04.2013: ASM-PACE Blog - asking the question: "Illegal Mining" ... a factual or conceptual threat?

Today the ASM-PACE blog askd the question: "Illegal Mining" ... a factual or conceptual threat? 

ASM stands for artisanal and small scale mining (ASM) and the EI Source Book website is undergoing a series of updates guided by the need to enhance our ASM content.  A commissioned Document (link to existing Documetns) for ASM is pending alongside these Source Book Chapters updates.

About ASM-PACE:  this began as a partnership programme between Estelle Levin Limited (who are also the evaluators of the Source Book project) and the World Wide Fund for Nature (WWF, also known as the World Wildlife Fund for Nature) to address the environmental impacts of ASM in some of the world's most important ecosystems. Active since 2010, the programme is focused exclusively on addressing the impacts of ASM occurring in protected areas and critical ecosystems ("PACE").

Through its Guest Blog Series, the ASM-PACE Programme invites ASM experts to share their knowledge, experiences and opinions on issues pertaining to ASM, and particularly on ASM in protected areas and critical ecosystems, with the aim to foster continued dialogue, country-specific learning and share best practices on ASM interventions. 




32) 25.04.2013: First “Shadow” Report on EI Source Book project website

For the first time a “shadow” report on the Extractive Industries Transparency Initiative (EITI) has been published, on the CEPMLP-led EI Source Book project website.  Whereas EITI, is a partner to the project and has provided numerous documents for download from Chapter 4 (Accountability and Transparency) of the Source Book, this is the first time that an external, independent, on-the-ground validation of EITI (or “shadow EITI validation”) has been published on the site.

The Extractive Industries Transparency Initiative (EITI) was launched in 2002 to improve governance in resource-rich countries by setting a global standard for the full publication and verification of company payments and government revenues from oil, gas, and mining.  The shadow report is for the country of Afghanistan.  Its full title is “Shadow Validation: Analysis of Afghanistan EITI Reconciliation Reports and Civil Society Participation”.

The reports recommendations are as follows:

• Afghanistan’s future reports should disaggregate by company, revenue stream, project and commodity.

• Forthcoming reconciliation reports should relate payment streams reported within the EITI process to financial terms laid out in relevant mining or gas/oil contracts.

• Discrepancies need to be addressed more vigorously and adjusted prior to publication, or proper explanation of discrepancies need to be included.

• Civil society should strengthen its coordination efforts and improve knowledge-sharing.

• Civil society should rotate the leadership of the coalition to encourage more active involvement from all interested CSOs.

• Civil society should conduct a quarterly review of the work plan to better monitor

implementation and work plan milestones.

• Civil society should be provided additional capacity-building and trainings in report analysis and general awareness about civil society in EITI.

• The AEITI website should feature a database of all companies in the mining, gas and oil sector and identify their revenues and if they fall within the materiality threshold

• AEITI’s record of the board meetings should be better labelled and minutes should be updated following the meetings.

• Information on EITI and Afghanistan’s extractives industries needs to be more accessible in local languages to contribute to public and civil society understanding.

With thanks to the authors, Roya Aziz and Javed Noorani, and to the consultants from Moore Stephens Azerbaijan, who conducted the two Afghanistan EITI reconciliation reports that form a vital and substantial part of the evidence base for this Shadow EITI Validation.




33) 18.04.2013: Great Start to Calgary's Extractive Industries Governance Program

Prof Peter Cameron, Director of CEPMLP and the EI Source Book, reports from Canada:

The Canadian School of Public Policy at Calgary kicked off its new Extractive Industries Governance Program on 17 April with an inaugural Symposium. Called ‘Extractive Resource Governance: Creating Maximum Benefit for Countries, more than 150 delegates were addressed by Dr Rilwanu Lukman, former President and Secretary General of OPEC and Minister of Petroleum Resources in Nigeria.

Dr Lukman covered a wide range of topics in his speech and subsequent Q&A session. In particular, he welcomed the EITI and similar initiatives that have placed the issue of transparency firmly on the agenda of governance in resource rich economies.  He did not seem to think that the North American driven shale revolution is a threat to OPEC’s role, noting that it was still a recent phenomenon and that the jury was out on its long term significance. Membership of OPEC was clearly going to be reviewed as new exporting countries joined the international scene. Would countries like Ghana and Uganda be joining OPEC? In time, was his cautious response.  

For many countries new to the petroleum sector, the Nigerian experience is clearly important and a source of lessons, both negative as well as positive. What did he think about the Nigerian approach to refining of petroleum? Why is refining not optimal in the country? There are state of the art refineries there, he observed, but maintenance is not good and they are allowed to decline into disrepair. Some people do not want them to work.

On the subject of benefits agreements between landowners /communities and oil companies in the Niger Delta, why did he not make recommendations on this matter when he was chair of the oil and gas implementation committee some years ago? Such agreements are good to have, he commented, but best done on a voluntary basis between the companies and the communities, rather than through mandatory rules made by the federal government. 




34) 18.04.2013: Many thanks to Science and Society journal, and its editor David Laibman

Further to popular demand I took the unusual step of contacting an academic journal, Science & Society, to ask for permission to upload one of their articles to this website.  I am very pleased to say that the Editor, David Laibman, graciously gave this permission.  The article in question is as follows (full text download):

Hammond, J.L. (2011). The Resource Curse and Oil Revenues in Angola and Venezuela. 75(3) Science & Society 348-378.




35) 17.04.2013: High-level Workshop on the Role of Intergovernmental Agreements in Energy Policy

The Source Book is very pleased to share the following information from  Dr. Yulia Selivanova, Expert, at the Energy Charter Secretariat, at her suggestion.  Yulia can be contacted at:  e-mail: selivanova@encharter.org; Tel.: (+32-2) 775 98 00; DDI: (+32-2) 775 98 49; and Fax: (+32-2) 775 98 42  

About the Energy Charter: "the fundamental aim of the Energy Charter Treaty is to strengthen the rule of law on energy issues, by creating a level playing field of rules to be observed by all participating governments, thereby mitigating risks associated with energy-related investment and trade." 

Message from Yulia: "the Energy Charter is organising a HIGH-LEVEL WORKSHOP ON THE ROLE OF INTERGOVERNMENTAL AGREEMENTS IN ENERGY POLICY, to be held in World Trade Organisation (WTO) 29 April. This event will be hosted by WTO (Director General Pascal Lamy will speak), H.E. Ambassador Kuneralp (Chairman of the Special Session of the Committee on Trade and Environment and Energy Charter's Conference Chairman) and our Secretary General Amb. Rusnak.

This event is aimed mainly at WTO Ambassadors and delegations, but we will be able to invite a limited number of other participants, let me know if you or your colleagues would like to come. We will discuss the application of existing international rules embodied in WTO and the ECT to trade and investment in energy. The workshop will also address current challenges the energy sector faces and the implications of such challenges for the regulatory framework.

To attend the event you MUST register (even if you have a badge for the WTO), as we need to ensure that we have enough places for all.
Here is the link to the program and registration details: http://www.encharter.org/index.php?id=595&L=0

Please do not hesitate to contact me for any questions you may have.

I remain with best regards, Yulia"

 




36) 09.04.2013: South Sudan’s oil production restarts amid concerns about transparency - Global Witness

News from EI Source Book partner Global Witness:

As oil production resumes in South Sudan this week, Global Witness is calling on the government to implement the transparency measures passed as part of oil legislation last year and to clarify recent reports of secretive contract allocations.
 
South Sudan’s oil legislation includes clear requirements for the publication of oil sector data and contracts which, if implemented, would enable citizens to monitor and verify the management of their natural resources,” said Global Witness campaigner Dana Wilkins (email link). “This week’s resumption of oil operations will test whether the government’s commitment to transparency is genuine.”
 
When South Sudan gained independence from Sudan in 2011, it became the most oil-dependent economy in the world. South Sudan’s only route to export its crude oil is currently via Sudan’s pipelines and port. The two countries had spent more than a year and a half negotiating new transit terms when Sudan began confiscating crude oil shipments at the port in late 2011. South Sudan responded by halting all production and exports in January 2012. At the time, oil revenues made up more than 97% of the South Sudanese national budget.
 
More than a year on from the shutdown of operations, the oil transit deal and some key security arrangements have been resolved and South Sudan has announced the resumption of oil production. New export revenues, expected by June, will provide South Sudan with much-needed cash and could reinvigorate the country’s struggling economy.
 
Risks of corruption and mismanagement in the oil sector remain high, however. [1] In addition to the publication of data and contracts, it is critical that the government immediately addresses ongoing rumours that new oil contracts may have been awarded over the last year, apparently without the open, competitive, and transparent bidding processes included in the 2012 oil legislation. At a minimum, the government should immediately publish:
 
·          The most recent oil block map;
·          Information on all companies holding stakes in South Sudan’s oil sector; and
·          All existing oil contracts.
 
There have also been recent reports of damaging changes made to the draft (2012) Petroleum Revenue Management Bill. [2] The changes are rumoured to include the removal of taxes, signatures bonuses and other fees from the definition of ‘petroleum revenues’ as well as fewer protections on how oil can be used as collateral for government borrowing. If true, these changes would significantly limit the extent to which the management of oil sector revenues is subject to public scrutiny.
 
“If managed well, the oil sector could provide desperately needed development and basic services for South Sudanese citizens,” said Wilkins. “The oil legislation specifically includes the transparency and accountability mechanisms necessary to help make that happen. Now is the time for the government to demonstrate its commitment to openness and public scrutiny.”

For more information contact Dana Wilkins on +44 (0)7808 761 570,  or Annie Dunnebacke on +44 (0)7912 517 127.
 
Notes:
[1] Last year, a leaked letter written by President Salva Kiir to over 75 government officials estimated that high-level theft had cost the state more than US$4billion since 2005.
[2] For more information see ‘Blueprint for Prosperity: How South Sudan’s new laws hold the key to a transparent and accountable oil sector’ (& selected sections also translated into Chinese).

 




37) 05.04.2013: AIPN Scholarship continues to pay dividends to Source Book content developer

Job KahigwaMr. Job Kahigwa (pictured) is a UK trained Ugandan Extractive Industry & Energy Specialist and a Scholar of the Association of International Petroleum Negotiators (AIPN). He holds a Master of Laws (with a Distinction) in Petroleum Taxation and Finance from the Centre for Energy, Petroleum and Mineral Law and Policy (CEPMLP) at the University of Dundee. He is also currently completing a Master of Science in Energy Studies (with a focus on Mineral Resources and Energy Policy and Economics) at CEPMLP.

For both Masters qualifications, Job has attracted highly competitive scholarship funding from highly respected sponsors, including the Association of International Petroleum Negotiators.

In Job’s own words: "A month after I had joined CEPMLP, I registered as a student member of the Association of International Petroleum Negotiators (AIPN) and I have been an active member since inception. As part of a student outreach and in honour of one of its founding members, Gordon Barrows, AIPN awards 8 scholarships annually to the best applicants from selected major universities globally where Dundee University is included. When I learned about it and checked for the eligibility requirements, I felt I undoubtedly met all of them: demonstration of strong character, exhibition of academic ability as well as leadership and negotiation ability that would potentially make a significant contributor to the field of international oil and gas negotiations."

"I then sought recommendation letters from CEPMLP and Extractive Industries Source Book Director, Professor Peter Cameron who had in fact initially recommended me to join the association and Evelyn Parra, a honorary lecturer at CEPMLP whom I was luckily allocated to as a mentee through the Centre’s Mentoring Scheme and had always urged me to apply for a second masters programme. I am very grateful for their combined fruitful and sound advice, advice which continues to pay dividends even now in March 2013."

Job has enthusiastically supported the development of the EI Source Book, not least with respect to sourcing and authoring authoritative content for eastern Africa.

In so doing, Job has drawn upon his specialisations in: policy, legal and contractual frameworks; fiscal design and administration; and revenue management and allocation topics within the extracitve industry value chain. Additionally, Job has a strong grounding in the financial, commercial and economic aspects of the international oil, gas and mining industry. Follow Job on Twitter: @jobkahigwa




38) 02.04.2013: Executive Training on Extractive Industries and Sustainable Development

This is a last call for places on the Extractive Industries Executive Training Program hosted jointly by Source Book partner Vale Columbia Center on Sustainable International Investment and the Center on Globalization and Sustainable Development.

The organizers are now accepting applications for the first Executive Training on Extractive Industries and Sustainable Development. This two-week course will cover cross-cutting themes such as the economics and geopolitics of the extractive industries, legal and fiscal frameworks, leveraging investments through industrial policies and infrastructure development, revenue management and planning, local community development and environmental protection, including planning for and managing the impact of climate change. The program is intended for public sector officials from resource-rich developing countries, whose responsibilities relate to the development or management of the extractive industries sector, as well as for representatives of local civil society organizations and other interested parties. The course will help to build the skills necessary to support the responsible development of countries’ extractive industries sector, and facilitate knowledge sharing across the different government departments and ministries involved in the sector, as well as among the different countries represented at the course.

This year’s program will take place at Columbia University from June 10 to 21, 2013. The deadline for applications has been extended to April 12th, 2013; please see the flyer for this event for more information.




39) 29.03.2013: Estelle Levin Ltd appointed as EI Source Book evaluators

Estelle Levin Ltd logoEstelle Levin Ltd have been appointed as Extractive Industries (EI) Source Book evaluators for the full duration of the project to date. The company is based in Cambridge, England, and has a particular focus, inter alia, the Artisanal and Small-scale Mining (ASM) sector and governance issues across the EI as a whole.  

Estelle Levin Ltd introduce themselves as follows: we are "a boutique international development consultancy providing research, analysis, and advisory services on natural resources governance and sustainable supply chains. We help our diverse clients build resilient futures for them and their stakeholders by advising them on how to mobilise natural resources in ways that achieve their commercial or development ambitions whilst ensuring ecological protection and social empowerment."




40) 25.03.2013: EI Source Book Director meets President of Malawi at Westminster

EISB Director meets Malawi President

On Tuesday 19 March 2013 the Director of the EI Source Book and of CEPMLP, Professor Peter Cameron met President Joyce Banda of Malawi at a reception held by the Scottish Secretary of State, Michael Moore MP at Westminster.

The President told Professor Cameron about her decision to freeze expansion of mining in Malawi until a new policy and laws had been developed. She asked CEPMLP for expert assistance in meeting this task and for his thoughts on capacity building in Malawi in mining education and training.

CEPMLP already has three Malawian students in its long established mining programme with roots in law, contracting and governance issues. Prof Cameron emphasised the importance of including clear and positive proposals on artisanal and small scale mining (ASM) in the new mining policy, and on setting out fair rules that were likely to stand the test of time.

In the follow up conversation with Mines Minister John Bande, an exchange of senior visits was agreed in the coming months to plan in detail for cooperation between CEPMLP and the Ministry in Malawi.




41) 24.03.2013: Peru: A Critical Case Study of the Dissemination & Impact of EITI National Reports

This study finds that the dissemination of the Extractive Industries Transparency initiative (EITI) National Reports in Peru is yet to make much discernible impact in promoting transparency, public debate and accountability for the revenues obtained from extractive industries.

The study was a joint report of the following organisations: Paz y Esperanza; Tearfund; and the Revenue Watch Institute, a partner organization of the EI Source Book.  For further analysis, read the: Full Report; and the  Tearfund GOXI blog on this topic; which includes the following key finding "the overwhelming response from local communities was the desire to know what impact the revenues from extractive industries were having on their daily lives. Put simply - what money was paid for the mine in their community, what reached the district and what it was being spent on." 

The main gaps identified by those interviewed were:

- Communication. There was inadequate outreach for the dissemination meetings; written EITI information produced did not necessarily reach the regions and was often difficult to understand unless interpreted by third parties; and the information was a number of years out of date and was therefore seen as being of little relevance.

- Content. Stakeholders wanted much more information than just revenues and expenditure at a national level. They wanted information relevant to their lives such as company payments and government spending at local levels, benefits to their community, production volumes, prices and company profits, and the details of contracts between companies and the state.

- Context. There was insufficient attention given to the local context where views tend to polarise into pro- and anti-mining; likewise, little attention was paid to the different audiences that the EITI reports were trying to reach. Furthermore, few links were made to other initiatives, such as wider investment and tax regimes, government development planning or environmental issues.

The report makes recommendations for the future development of the EITI further to these findings.




42) 22.03.2013: Extracitve Industries Source Book, Prof. Peter Cameron, a new Fellow of the Royal Society of Edinburgh

The 2013 election of new Fellows of the Royal Society of Edinburgh has seen the honour bestowed on five academics from the University of Dundee, including the Director of the Extracitve Industries Source Book, Prof. Peter Cameron.

The new Fellows from Dundee are:

  • Professor Peter Cameron, Director of the Centre for Energy, Petroleum & Mineral Law & Policy
  • Vicki Hanson, Professor of Inclusive Technologies (School of Computing)
  • Pauline Schaap, Personal Professor of Developmental Signalling (College of Life Sciences)
  • Robbie Waugh, Principal Investigator (College of Life Sciences & The James Hutton Institute)
  • Paul Wyatt, Professor of Drug Discovery (College of Life Sciences)


Professor Pete Downes, Principal of the University, congratulated the new Fellows, saying, "I am delighted to see five more of our distinguished staff being recognised as new Fellows of Scotland's national academy of science and letters. It is a credit to their individual professional achievements and a source of pride for the whole University."




43) 18.03.2013: EI Source Book-Malawi links to be strengthened with Presidential meeting

Professor Peter Cameron, Director of the University of Dundee’s Centre for Energy, Petroleum and Mineral Law Policy, will tomorrow visit Westminster to meet with the President of Malawi.

Professor Cameron will discuss issues relating to the extractive industries in both countries with President Joyce Banda at Dover House on Tuesday, 19th March, following on from a wreath-laying ceremony at David Livingstone’s tomb at Westminster Abbey earlier that day.

Malawi has an abundance of unexploited natural resources, and a significant number of Malawian students have come to Dundee to study at CEPMLP in recent years, including Dr Leonard Kalindakafe, Permanent Secretary to the Minister of Mines.

Professor Cameron will also meet with the Minister of Mines and David Mundell MP, Parliamentary Under-secretary of State for Scotland, in Edinburgh to discuss training Malawian officials in mining contract negotiations.

“I welcome the visit of the Malawian President to Scotland and look forward to meeting Her Excellency,” said Professor Cameron. “Joyce Banda is internationally renowned for her untiring work in promoting education and women's rights in Malawi, amongst other issues, both prior to coming to power and now as her country's new President. 

“CEPMLP alumni from Malawi have been notably successful in their subsequent careers, acting as role models for their fellow nationals to emulate, and validating the benefits to Malawi and its people of investing strongly in education, regardless of gender. 

“The quality of student that CEPMLP attracts from Malawi is consistently impressive.  Dr Leonard Kalindakafe holds the highest civil service post in the Ministry, which recently shifted its focus from mining and energy to exclusively focus on mining issues.”

President Banda’s visit to Scotland coincides with the David Livingstone bicentennial celebrations. She will address MSPs, guests and members of the public to mark the occasion before heading to London.

It is hoped the meeting between Professor Cameron and President Banda will lead to a strengthening of education links between Dundee and Malawi.

Dr Kalindakafe is also Chairman of the Intergovernmental Forum (IGF) on Mining, Minerals, Metals and Sustainable Development, a body committed to enhancing the contribution of mining to sustainable development and poverty reduction.

The organisation has 48 member countries and is a partner of the Extractive Industries Source Book, a multi-agency World Bank-funded free resource for the oil, gas and mining sectors globally and led by CEPMLP.

Malawi pages of EI Source Book project are at www.eisourcebook.org/1484_Malawi.html




44) 11.03.2013: Reflections on Sovereignty over Natural Resources and the Enforcement of Stabilization Clauses

Oxford University Press just released the Yearbook on International Investment Law & Policy 2011-2012. It analyses developments as regards the magnitude and salient features of investment flows and the question of home-country policies, international investment law and arbitration and trends in international investment agreements. This edition of the Investment Yearbook pays special attention to regulatory and policy developments regarding foreign direct investment in the extractive industries, before addressing topical issues that include discussions of the Argentine annulments and the application of the customary necessity rule, sovereign debt, public interest regulation, human rights obligations under investment treaties, host state corruption, the economic analysis of substantive investment protections, and an assessment of Chinese outward investment.

As a taster, please see the following extract from the introduction to Prof Peter Cameron's article forming part of the same: "Reflections on Sovereignty over Natural Resources and the Enforcement of Stabilization Clauses".

External links to: download the book ordering information flyer; and purchase the book.




45) 08.03.2013: Women, Careers in the Oil & Gas Sector, and Scottish Independence

On the 8th March 2013, International Women's Day, the University of Dundee will host a public debate: 'Independence: a distraction or an opportunity for Scottish women?'

Members of the Scottih Parliament (MSPs) Shona Robison and Kezia Dugdale, and others, will examine the role that women will play in deciding the nation's future. Both MSPs have kindly given interviews ahead of the debate to the University of Dundee-led Extractive Industries Source Book project on the subject of the value to women of a career in the Scottish Oil & Gas sector.

 

In conversation with the Source Book project, Dundee City East Member of the Scottish Parliament (MSP), Shona Robison (@ShonaRobison) stated:

"The oil and gas industry in Scotland is a major employer and although women are employed among the 200 companies and 150,000 in the sector there is still a considerable gender imbalance.

"North Sea oil and gas has been the cornerstone of the UK Energy sector since the 1970s and will be a significant resource for an independent Scotland as part of a wider energy mix including offshore and onshore renewables; it is crucial that more women with qualifications in sciences and engineering are attracted into the industry.

"All of Scotland’s 15 Universities have strong links with the oil and gas sector, including the University of Dundee Centre for Energy, Petroleum and Mineral Law and Policy and forty years of oil and gas in the North Sea has given Scotland a strong position globally for expertise and innovation.

"Norway has perhaps shown a lead in working towards gender balance in the sector and we should do what we can to make the sector more appealing to women graduates who seek technical challenges and demanding careers in the energy industry."

 

Kezia Dugdale MSP (@kdugdalemsp) stated:

"There’s a huge shortage of home grown skills in the Oil & Gas industry and there’s an estimated 1000 jobs to come. The Scottish Government need to ensure these opportunities aren’t just open to women, but that they actively seek to bring more women in to the industry."

 

The event, entitled 'Independence: a distraction or an opportunity for Scottish women?', has been organised by the University's '5 Million Questions' project to coincide with International Women's Day.

"The 2014 referendum on Scotland's constitutional future will impact on the lives of every Scot, and so it is right to examine what it means for Scottish women" said David Torrance, Associate Director of 5 Million Questions.

"Is it an opportunity to address the issues that concern women in Scotland or is it just a constitutional distraction? Despite analysts predicting that women's votes will be critical to both camps there has been an absence of gender analysis in the broader debate so far.

"We are delighted to be welcoming five respected and influential Scottish women to debate what the independence referendum means for them."

The University launched the 5 Million Questions project to examine the issues surrounding the biggest event in Scotland for over 300 years. Every aspect of Scottish life stands to be impacted upon by the result of the 2014 referendum, and everyone has a question about how the decision will affect them and the future of the country.

The public debate to this stage has been both highly technical and overtly party political. 5 Million Questions aims to stimulate wider debate, apply academic rigour to examination of the issues, and engage with the public on all aspects of the major questions they are facing.

'Independence: a distraction or an opportunity for Scottish women?' takes place as part of Dundee Women's Festival. A limited number of free tickets for the debate, which is being held on Friday, 8th March and available from events@dundee.ac.uk, www.dundee.ac.uk/tickets

More information about the project can be found at www.fivemillionquestions.org and (Twitter) https://twitter.com/Fivemillionqs

For more information on other events in the Dundee Women's Festival, which run from 4th-24th March visit, www.d-v-a.org.uk/dundee-womens-festival.htm

 

For media enquiries contact:
Grant Hill
Press Officer
University of Dundee
Nethergate, Dundee, DD1 4HN
TEL: 01382 384768
E-MAIL: g.hill@dundee.ac.uk
MOBILE: 07854 953277




46) 06.03.2013: Making Resource Contracts Publicly Accessible

Source Book partner the Vale Columbia Center (VCC), a Joint Center of Columbia Law School and the Earth Institute at Columbia University, together with a working group commissioned by the World Bank Institute and directed by (another Source Book partner) the Revenue Watch Institute, has been working on an online, searchable, user-friendly database of oil, gas and mining publicly available contracts, initially focused on Sub-Saharan Africa.

This working group got the opportunity to pilot the database with Guinea upon the Guinean government’s request. On February 15, 2013, Guinea launched a database of mining contracts and made publicly available more than 60 contract documents covering 18 mining projects. This is a huge advance in the movement towards greater transparency and accountability in the mining sector in Guinea and the government is already committed to continue to update the database with future contracts and amendments. In addition, by publishing these contracts, Guinea fulfills its commitments to the Review of Mining Contracts and Licenses adopted in 2011.




47) 06.03.2013: Happy Ghanaian Independence Day

Three Ghanaian Source Book users share their thoughts and reflections on Ghanaian Independence Day; see CEPMLP LinkedIn Group for details.




48) 22.02.2013: Controversy at the African Mining Gathering - the Indaba

A Personal View from Professor Peter Cameron, Director of CEPMLP and the EI Source Book

The annual mining indaba – a Zulu word for gathering - at Cape Town in South Africa is an African success story: it is a unique forum for meeting Ministers from virtually all African countries involved in mining and Chief Executive Officers (CEO)s from mining companies, large, medium and small. It also brings together the independent voices of expert commentators, international development organisations and regional or international Non-Governmental Organizations (NGO)s. With more than 7,500 delegates this year’s three day event – with the theme of ‘Investing in African Mining’ - is the African counterpart to the kind of mega-networking event that can be found in other continents where mining is playing a growing role in fostering economic development and poverty alleviation.

Yet some are desperately unhappy about it. On the first day of the event, which I was invited to attend, a crowd of demonstrators marched along a nearby street and entered the area outside the conference building, shouting and chanting, holding up placards for delegates to see (please see videos above). Hand-held loudspeakers carried their words through the air punctuated by chants that might have come from Shaka’s Zulu army as it prepared to rout an enemy. Wearing orange and blue T-shirts these men and women dazzled the bystanders with their energy and enthusiasm. They reminded me of striking employees I once saw in Santiago de Chile outside my hotel, complaining about pay, and banging pots and pans, singing happy songs. At first I thought they were having a party. Here too, there was singing, chanting, banging of drums and gyrating human bodies. Looking into their eyes, you could see their commitment – but remarkably given the uncompromising words on their placards there was no hint of violence. In the best sense, it was democracy in action. 

The slogans on the placards were uncompromising: “Our Mineral Resources – Our Future!”; “If it can’t happen in Canada why can it happen here?”; “Remember the Miners of Marikana!” (in reference to the platinum mine in South Africa where 37 striking miners were shot by police last year). The demonstrators referred to themselves as the Alternative Mining Indaba. The protesters were claiming that the government and the mining sector were placing profits ahead of people, the environment, and sustainability. They were addressed by the Anglican Bishop of Pretoria, Joe Seoka, who told the audience on the steps of the conference centre: “We are also objecting that this indaba only has the government, the investors (in the mining sector) and those who control the mines. There are no union or labour representatives”. He claimed that the real owners of the mineral resources – “the people of South Africa” were not represented. 

Comment

The demonstrators’ actions and slogans highlighted four issues for me: firstly, the differences between South Africa and the rest of the continent; secondly, the incidence of conflict in the mining sector; thirdly, the need to manage expectations and the role of education in this process, and finally the role of the small scale mining sector. Mining in South Africa has been established on a large scale for many decades, but for a fair number of countries represented at the indaba mining is a much more recent industry. The long commodities boom in the last decade has triggered investment in new areas, and suddenly countries like Madagascar, Ghana and Mozambique face exciting new prospects for revenues and spin-off development from their mining industries.

By contrast, investment in South African mining during the same period has been flat. Ministers from many countries were making it clear to delegates that they welcomed investors. Many were in the process of updating their existing laws or introducing new ones to respond to the expected investment flows. But, there is no denying that like South Africa they are very sensitive to any suggestion that the ‘people’ are not getting their fair share of the benefits, even where the benefits from production have not yet emerged. A second aspect that strikes the outside observer is the nature of conflict in the mining sector. The Marikana tragedy and subsequent strikes have highlighted the extreme dissatisfaction by many workers about job cuts and pay in the platinum, gold and coal industries. This is unlikely to go away soon as a source of conflict. Nor is this a uniquely South African problem. There have been conflicts in other parts of Africa. Tanzania is one example of this. There are a myriad of reasons for these conflicts, which are quite different in character from the kind of military conflicts we have seen in the past. If the costs of mining are local, there will be resentment when the benefits appear to accrue to and remain at the centre. Perceptions are usually local in countries where the nation state is a fairly recent fact. A speaker from the International Finance Corporation (IFC) was candid in telling delegates he expects these conflicts to increase in the near term. It is a small step from this to the third topic – how to manage expectations? The demonstrators rightly thought that the lion’s share of benefits from mining should go to Africans. But this is hardly original, and their governments would surely agree. At the same time, if the same people want the capital and expertise from foreign investors, they need to understand what investors expect and how arrangements are typically designed to keep both parties happy, preferably over the long term. Or they can go it alone, taking much longer to develop the same resources and ‘learning by doing’, a costly route but certainly one that some might prefer to take. The authors of the African Mining Vision have done a lot to try to raise awareness of these issues among Africans, emphasising the importance of education to ensure that the right expertise is present in Africa to reduce dependence on outside sources. It was a pleasure to see at the indaba how much credibility this project has built up in a very short time. They are in the forefront of thinkers who believe that specialist education should be based as much as possible in African institutions rather than abroad.

Partnerships between existing education providers and such institutions can speed up the transition to this desirable goal. The category of ‘artisanal and small scale miners’ or ASM is now understood to include tens of millions of workers around the world, analogous to subsistence agriculture. The Ghana Minister for Mines was openly positive about the contribution such workers make to the country and generally there is more appreciation that these largely unregulated workers are a source of benefits rather than a problem. On the fringes of the indaba the Inter-Governmental Forum (IGF) (an EI Source Book partner) organised a constructive debate on issues that included this one. The World Gold Council organised a similar event but more exclusively focussed on ASM. Many NGOs participated in the resulting debates.

* * *

The demonstrators arrived just after South African Minister of Mines Susan Shabangu had given her opening speech to a packed hall of thousands of delegates. Her speech is uploaded to the website so you can read it word for word. Afterwards, the Minister and her senior colleagues held a press conference across the road in the Westin Hotel. I was privileged to be there and hear how she fielded some tricky questions. The main subject was the proposed ‘Mineral and Petroleum Resources Development Draft Amendment Bill’, circulated for consultation and designed to amend the major Act for the sector of ten years ago.

More of this below, but to a non-South African, the Minister’s comments on the Kimberley Process Certification Scheme were extremely interesting. She has taken the chair of this Scheme – which was one of the very first initiatives to use transparency requirements to track so-called ‘blood diamonds’ (rough diamonds used by rebel movements to finance wars against legitimate governments) and restricting their import from states where they were used to support conflict. Faced with a critical question about the achievements of this Process, which continues to attract international criticism, the Minister robustly defended it, claiming that it had brought about peace in Africa; that it had helped to bring about stability in several countries and contributed to ensuring that Charles Taylor (the former President of Liberia) had been brought before the International Court in The Hague. On the deaths at Marikana last year, a journalist put a question to the Minister that speculated about a possible repetition if unrest breaks out again in South African mines. She invited the general secretary of the National Union of Mineworkers to comment, which he did (an indication that unions were in fact present at the indaba; indeed, the delegation was staying at the same hotel as me). The hot topic at the press conference was the draft amendment Bill, aiming at changing South African mining legislation itself [see above], and the Minister received a number of questions on this. The intentions of the Bill are to remove ambiguities in the existing law, to streamline administrative processes, and to improve the regulatory regime. Critics argue it does the opposite. It sets up an export licensing system probably aimed at iron ore and coal, although it is not clear from the draft which minerals it is targeted at. It requires ministerial consent prior to the transfer of any interest in a listed company which holds a prospecting or mining right. On the hydrocarbons side, the Bill abolishes the state regulatory agency for petroleum, and transfers its powers to nine regional managers in the Ministry itself. It also gives a free carried interest to the state in all new exploration and production licences. The latter is perhaps unsurprising given the current level of interest on the African East Coast, but the institutional change is a bit surprising. Indonesia has recently done something similar, but no-one seems to think it is an improvement on an independent regulatory body. The export restrictions are interesting. They fly in the face of the assumptions on which bodies like the World Trade Organization (WTO) were based. Yet, with respect to strategic resources such as minerals, there are quite a few governments (and not just in Africa) that would prefer to see them used at home. The arguments are clearly political and not economic – or at least that is how it appears to a non-economist. They may create problems for South Africa in relation to its (WTO) membership, but apparently that is something which the drafters are prepared to face, if such problems do arise. There were many grumbles from investors in the corridors at the indaba about the investment climate in South Africa. The economic facts certainly support their concern. The dilemma that the Government faces seems to be one of taking measures that ease the many social tensions around the mining sector in the country without causing too much damage to the investment climate: some damage seems to be a price they are prepared to pay. To be fair to them, it is an incredibly difficult balancing act they have to perform.

* * *

China! Everywhere one hears of the Chinese in Africa. At the indaba there was a grand reception held by the Ministry of Land and Resources in China, with a number of Chinese mining companies present. They gave me a lapel badge which I wore during the reception. Since 2008, Chinese investment in African mining has gone from nowhere to having a high degree of visibility, challenging the traditional hegemony of the Western mining companies in Africa in the process. The investment model has usually been a ‘resources for infrastructure’ one. In return for investment in infrastructure the investor acquires rights to explore, extract and dispose of the resource (in very simple terms). For Africa this is attractive since it has an infrastructure deficit in most parts of the continent. Many countries simply cannot develop their potential because of the infrastructure constraints. Mining projects require enormous amounts of infrastructure and have the potential to act as a catalyst for wider economic development. So, now, non-Chinese investors are taking time to review this approach. One of CEPMLP’s Global Faculty, Stéphane Brabant, gave a presentation on just this subject, ‘Resource-for-Infrastructure Deals’, which attracted a great deal of attention. Stéphane (a partner at Herbert Smith Freehills) reviewed specific examples of this approach to investment, explaining their pros and cons. Happily, he was able to relate this to both Francophone and English-speaking parts of Africa.

* * *

One thing that the Alternative Indaba protesters have not understood is the extent to which the indaba now attracts independent minds and critical thinkers. For an academic like myself it is becoming the real value of participating. Whether these are academics, consultants, representatives from NGOs, international institutions, or journalists, these independent and critical thinkers appear to be growing in number and do much to make the event a stimulating one. At one reception I met Duncan Clarke and we talked about his latest book on Africa, Africa’s Future: Darkness to Destiny. Duncan is always keen to challenge simplistic but widely prevalent (usually Western) views of Africa. His last book ‘Crude Continent’, about oil in Africa contained some rare, complimentary remarks about Angola, which has often been criticised in relation to transparency. His views were much more nuanced and highlighted the many challenges faced by the country since its civil war in the not too distant past. Elsewhere, our Global Faculty members Magnus Erickson and David Humphreys were giving talks that sketched out overviews of the mining sector. They were panoramic and highly informative, as well as being independent and critical. David was a former chief economist at Rio Tinto and then at Norilsk Nickel. Like Magnus, he is now an independent consultant (when he is not visiting CEPMLP to deliver lectures to enthralled students). Other independent minds at the indaba included academics from several Australian universities, such as Western Australia and Curtin, both in Perth, and Queensland, which has a highly regarded Centre for Social Responsibility in Mining, a partner to the Source Book; also present were professors from McGill University in Canada, and from the ever-dynamic (& EI Source Book partner organization) Vale Center for Sustainable Investment at Columbia University in New York. It was a real delight to see so many CEPMLP alumni and global faculty members at the indaba. Leonard Kalindekafe, who obtained his PhD with us some years ago, is now the Permanent Secretary of the Ministry of Mines in Malawi. He introduced me to the Minister, the Hon. John Bande, and some of his colleagues at the Inter-Governmental Forum which he Chairs and which is an EI Source Book partner organization. It has blossomed recently and now has almost 50 member countries. They have produced a Mining Policy Framework which is well worth a review.

Why was I there? I gave a talk on public-private partnerships in mining education at the invitation of (another EI Source Book partner organization) The World Bank, which held a two day session before the formal opening of the indaba. The idea of this (which will lead to a report in the coming weeks) is that education to develop skills in African mining can be increasingly based in African institutions, rather than abroad, and facilitated by funding from the private sector. The topic is rooted in the African Mining Vision and aroused a lot of interest among participants in the well attended event. This is an ongoing study which will I hope feed into the debate on specialist education in Africa, please see below. As you can see from my own thoughts above, I do not think the indaba is a victim of its own success. Probably more could be done to involve parties who were not present or at least not very visible. However, it remains a terrific advert for South Africa on the continent and globally, and for visitors like myself it was a unique learning experience. I am delighted I went there, and hope I can return.




49) 19.02.2013: Nigerians Claim Local Content Success

The  Nigerian Content Development and Monitoring Board has reported that, for the years 2010 - 2012, an impressive total of 30,862 local content jobs have been created.  2010 was the year in which Nigeria's Local Content Bill, the "Nigerian Oil and Gas Industry Content Development Bill", was promulgated into an Act of Parliament; impressively this document is the top EI Source Book download thus far for February 2013.  For the full story on this local content story please see the Lubepoint Wordpress blog entry on this subject.

 




50) 18.02.2013: Guinea: Making Contracts Public for Greater Transparency, Accountability

NEW YORK/CONAKRY, Guinea, February 15, 2013 — The government of Guinea’s online publication today of its contracts with mining companies brings significant transparency to the most important part of the country’s economy and advances the government’s review of all existing contracts, Revenue Watch said.

“The government should be congratulated for joining the growing number of countries that make contracts public,” said Daniel Kaufmann, president of Revenue Watch, an EI Source Book partner organisation.  “Publishing contracts allows citizens to evaluate the decisions their government makes about how publicly owned natural resources are used, and can make government more accountable for the deals it signs.”

Guinea’s Technical Contract Review Committee published on its website more than 60 contract documents covering 18 mining projects. The government thus fulfilled a commitment of the mining code adopted in 2011. The online materials include a searchable summary of contract terms, allowing non-expert readers to find key sections and understand the obligations for companies and the government.

The government has said it will add online any amended contracts and all future contracts. This has strong potential benefits for improving governance of the sector. Revenue Watch, in conjunction with the World Bank Institute and Columbia University, contributed to development of the online material, in response to a government request.

Guinea’s action is a model for other countries and demonstrates that making contracts public is possible even in challenging environments,” said Patrick Heller, senior legal advisor at Revenue Watch. “Contract transparency is one of the ingredients of effective government management of natural resources and of effective citizen oversight.”

Guinea’s step forward is particularly relevant to the Extractive Industries Transparency Initiative (EITI), which is debating whether to require contract disclosure by implementing countries,” Heller said, naming a further EI Source Book partner.

Guinea is rich in bauxite, iron ore and other minerals, and better regulation and governance of the mining sector are keys to accelerating economic development. According to the government, the contract review is examining all existing agreements, many of which were signed under non-transparent conditions and do not provide the country with economic benefits commensurate to the value of the resources.

The Revenue Watch Institute, an EI Source Book partner organisation, is a non-partisan, non-profit policy institute and grant making organization that promotes the effective, transparent and accountable management of oil, gas and mineral resources for the public good.

Contact: Robert Ruby (New York), Head of Communications.

Email: rruby@revenuewatch.org & Tel: +1-917-443-2392




51) 06.02.2013: Dr Leonard Kalindakafe: new Permanent Secretary to the Minister of Mines in Malawi

Our congratulations go to Dr Leonard Kalindakafe who has just been made Permanent Secretary to the Minister of Mines in Malawi.  This is the highest civil service post in the Ministry, which recently shifted its focus from mining and energy to exclusively focus on mining issues.

Leonard obtained his PhD at CEPMLP, lead partner of the EI Source Book, in 2007 with a thesis entitled 'Mining Policy Formulation: Analysing the Role of Stakeholder Dynamics'.

He is also Chairman of the InterGovernmental Forum (IGF), a body committed to enhancing the contribution of mining to sustainable development and poverty reduction, which has 48 country members.

Well done Leonard!  CEPMLP is proud of you!




52) 22.01.2013: Alternative Strategies for Mining-based Economies: Mining and Development in the Andean Region

Date: 04 March 2013, 09:30 - 19:30

Event Type:  Conference / Symposium

Venue: The Senate Room (Senate House, First Floor)

Venue Details:

    Senate House
    Malet Street
    London WC1E 7HU, UK

Download a map of the central precinct with directions for getting to the University of London Senate House.

Description:

 




53) 18.01.2013: Transparency Matters: Disclosure of payments to governments by Chinese extractive companies

From our partner, Global Witness:

China’s supply of natural resources is a key element in the drive to sustain economic growth and long-term energy security. However, many resource-rich countries that China does business with have fallen victim to the ‘resource curse’ – the paradox that countries and regions with an abundance of minerals and hydrocarbons tend to have less economic growth, more conflict and corruption, and worse development outcomes than countries with fewer natural resources. As a result, Chinese extractive companies face particular investment and security risks as they extract from resource curse affected countries and regions, making them vulnerable to corruption and instability.

Transparency Matters: Disclosure of payments to governments by Chinese extractive companies presents a rigorous assessment of the tax payments made by Shanghai-listed extractive companies to governments in resource-rich countries in 2010 and 2011. It finds that while several companies positively stand out in the amount and quality of information they publish, much more could be done by the companies and regulators to enhance reporting beyond existing requirements.

This report contains two original pieces of research exploring the potential role of the Shanghai Stock Exchange (SSE) to improve extractive company disclosure and transparency measures.

Downloads:

 




54) 17.01.2013: NERC (UK) Funding Research for Mineral Supply Chain Sustainability

Growth in the developing economies has resulted in an increase in the global demand for minerals and energy. At the same time the actions required to mitigate and adapt to increased levels of carbon dioxide in the atmosphere demand significant changes in energy generation, distribution and utilisation. Increased energy production from renewable resources, including wind and solar; growth in the numbers of electric and hybrid vehicles and improving the efficiency of domestic and industrial electronics will increase demand for the specific elements required for these green developments. Environmental technologies are evolving rapidly and so it can be difficult to make accurate predictions on future requirements but rapid growth in demand has raised concern over the security of supply.

The Natural Environment Research Council (NERC) is launching a £7 million research programme into the Security of Supply of Mineral Resources (SoS Minerals). This will support research that will address some of the key challenges within the NERC Sustainable Use of Natural Resources strategic theme. The overall objective is to provide the science that will enable the optimisation of the use of renewable and non-renewable natural resources whilst living within the Earth’s environmental limits. The SoS Minerals programme will focus on those elements that are required for the production and more efficient use of energy – defined as E-tech elements.

Downloads:

 

NERC is planning to hold a launch event in London (UK) on February 18th 2013 and would like to ensure that the wider community is aware of this programme and will be encouraged to engage.   The main programme themes are: 

  • Understand E-tech element cycling and concentration in natural systems; &
  • Understand how to predict and mitigate the environmental effects of extraction and recovery of E-tech elements

 

Event registration for funding launch is now open:

 




55) 08.01.2013: Global Witness Opposes ENRC Acquisition of DRC partner

Daniel Balint-Kurti, DRC Campaign Leader of EI Source Book partner organisation Global Witness, made his opinions plane at a meeting of Eurasian Natural Resources Corporation shareholders who voted through a deal to buy out the company's controversial business partner in the Democratic Republic of the Congo. He said: 

"I strongly oppose this deal as a shareholder of ENRC. I think you are laying yourself open to the gravest of corruption risks with this, which you've already outlined in your prospectus. And whatever the legalities of it, it is completely morally wrong to rip off one of the poorest countries in the world in such a blatant fashion."; more information on the Guardian website




56) 21.12.2012: ICMM December 2012 newsletter on health and safety is available to download

ICMM, an EI Source Book partner, has launched the latest issue of the Good Practice newsletter: special report on health and safety. 

ICMM’s Director of Health and Safety, René Aguilar, opens the newsletter by recounting the lessons learned and the challenges he faced during his 10 years at Codelco and as part of the San José mine rescue team in September and October 2010.

Alongside the core health and safety theme, the newsletter reports on some key developments for ICMM in 2012.

For more information, please see the ICMM website.




57) 03.12.2012: Brazilian Government publishes Concessions Regime details

On the 3.12.12 the Brazilian Government published a provisional measure setting out the nation's new concession regime.  Please see tabulations below.

NB: it is important to note that existing contracts with oil companies are not impacted by the below since these changes relate to how the different levels of Government (Federal Union, State and Municipality) divide up petroleum royalties between themselves, rather than the overall levels of royalties themselves.

Royalties: from a minimum 5% to a maximum 10% of gross production.

Sharing Mechanism (Onshore)

Current Concessions

Future Concessions

Royalty Level (over the minimum 5% / over the remaining amount)

5%

5% - 10%

5%

5% -  10%

Producer States

70%

52,5%

70%

52,5%

Producer Municipalities

20%

15%

20%

15%

Municipalities affected by load/offload operations

10%

7,5%

10%

7,5%

Ministry of Science and Technology 

 

25%

 

25%

Sharing Mechanism (Offshore)

Current Concessions

Future Concessions

Royalty Level (over the minimum 5% / over the remaining amount)

5%

5% - 10%

5%

5% - 10%

Confronting Producer States

30%

22,5%

20%

20%

Confronting Producer Municipalities

30%

22,5%

4%

4%

Municipalities affected by load/offload operations

10%

7,5%

2%

2%

Ministry of Science and Technology 

 

25%

 

 

Brazilian Navy

20%

15%

 

 

States’ and Municipalities’ Fund

10%

7,5%

 

 

Non-Producer States’ Fund

 

 

27%

27%

Non-Producer Municipalities’ Fund

 

 

27%

27%

Federal Union 

 

 

20%

20%


Special Participation Fee : from a minimum 0% to a maximum 40% of net revenues.

Sharing Mechanism

(Onshore and Offshore)

Current Concessions

Future Concessions

Ministry of Environment

10%

 

Ministry of Mines and Energy

40%

 

Federal Government

 

46%

Producer States

40%

20%

Producer Municipalities

10%

4%

Non-Producer States 

 

15%

Non-Producer Municipalities 

 

15%


Notes on Special Participation (SP) Fees:

  • payable quarterly on net revenues from fields that achieve substantial production volumes;
  • no SP due unless and until threshold volumes achieved;
  • standard reporting form, simplified when no SP due; and
  • gross revenues for field determined based on same volumes and valuations used for royalty, except oil and gas volumes used in operations, lost before metering or flared without authorization not included for purposes of SP.

 




58) 30.11.2012: USAID Welcomes Incorporation of Development into Kimberley Process Certification Scheme

USAID Press Office

WASHINGTON, D.C. – Today, the Kimberley Process Certification Scheme (KP), which was established to end the trafficking of “conflict diamonds,” adopted the Washington Declaration that more formally incorporates development objectives into KP implementation.

The text was developed by the KP Working Group on Artisanal and Alluvial Production, with support from USAID, the Diamond Development Initiative, and others, and brought to the floor for discussion at the KP Plenary meetings in Washington this week. Included in the declaration are several policy goals that have been spearheaded under USAID’s Property Rights and Artisanal Diamond Development (PRADD) program.

Significantly, PRADD has been instrumental in helping the KP recognize the role of economic development in bringing rough diamonds into legitimate chains of custody, and consequently better addressing the challenges of conflict diamonds.

“This is a noteworthy achievement,” says Dr. Gregory Myers, Chief of the Land Tenure and Property Rights Division at USAID. “The members of the KP should be congratulated in addressing what has historically been a very complex problem affecting many of the world’s poorest communities across Africa.”

USAID established the PRADD program in 2007 in recognition of the critical role resource governance plays in the ASM sector. Clarification and strengthening of property rights for artisanal miners is at the core of the program, but, is complemented by a number of activities including establishment of government traceability systems to track diamonds from the point of extraction to point of export; reform of land and mining laws and regulations; environmental rehabilitation through the introduction of complementary livelihoods; and organizational capacity building of artisanal miners. Many of these same initiatives are included in the Washington Declaration and will now serve as guidance for KP participant governments, NGOs and donor organizations seeking to support implementation of the KP.




59) 30.11.2012: Brazilian Presidential issues partial Petroleum Royalties Bill Veto

Brazilian President Dilma Rousseff has pleased oil-producing states and municipalities of her country, but angered non-prudicing states, by partially vetoing the Petroleum Royalties Bill.

The official text of these vetoes, including their justification, is available to download from the Source Book: Reasons for Presidential Vetoes, Petroleum Royalties Bill 2012 (in Portugueuse).

The fiscal regime for Production Sharing Contracts (PSCs) will now be as follows:

Royalties (15% of gross productions)

Sharing Mechanism

Onshore 

Offshore

Producer States

20%

22%

Producer Municipalities

10%

5%

Municipalities affected by load/offload operations 

5%

2%

Non-Producer States’ Fund

25%

24.5%

Non-Producer Municipalities’ Fund

25%

24.5%

Social Fund

15%

22%

 

Rodrigo Marcussi Fiatikoski, in conversation with the Source Book, reported that: "Brazilian President Dilma Rousseff has vetoed the whole Article 3 of the Bill 2565/2011, which would impose a new mechanism of sharing the royalties among producer and non-producer states and municipalities from current concessions, i.e. retroactivity.

The president will also sign a new decree, which must now be approved by Congress, creating an education fund that will absorb a 'substantial part' of the revenues from new oil wells, Education Minister Aloisio Mercadante told reporters at a press conference.

The other articles were sanctioned in full so now we have the following:

  • 10% royalties from current concessions: the same sharing mechanism from the past (as in the Petroleum Act – Law 9478/97);
  • 10% royalties from future concessions: new sharing mechanism (as in the Provision Act that will be publish by Monday, which modifies the Petroleum Act – Law 9478/97); and
  • 15% royalties from future Production Sharing Contracts (PSCs): new sharing mechanism (as in the Article 2 of the Bill 2565/2011, which modifies the PSC Act - Law 12351/2010).

She also announced that the Provisional Act will earmark revenues received by states and municipalities from future concessions and PSCs to expenditures in education.

The important message here is: there is absolutely no breach of contracts and no surprises either for International Oil Companies or National Oil Companies."

The original proposal: this new Bill, n.° 2.565/2011 would modify the above Law 9478, of August 6, 1997 and the Production Sharing Contract (PSC) Act (Law 12351/2010). It gained assent in the lower legislative house, the Chamber of Deputies, by 288 to 124 votes; the Senate (upper house), approved the Bill in 2011. I am grateful to Rodrigo Marcussi Fiatikoski, qualified Brazilian lawyer specialized in the oil and gas sector at Vieira Rezende, for the following detail re. which laws the new bill would amend that the bill amends, please see below:

"The first part establishes that the royalties for the PSC fiscal regime (any area but the pre-salt polygon in the Campos and Santos Basins) will be 15%. This was a pending question that hadn’t been defined yet in the new regulatory framework. For the existent and future acreages under the concession regime, the royalties remain 10%. In this section the bill amends the PSC." - NB: this 15% figure is confirmed in the above table.

"The second part (and most tricky) establishes retroactivity in the way the royalties from already conceded areas will be shared among producer and non-producers states and municipalities. In this section the bill amends the Petroleum Act (Law 9478/1997)." - NB: this part of the bill has now been vetoed by the President.

"The third part establishes the way royalties from future production sharing areas will be shared among producer and non-producers states and municipalities." - NB: see above table for details.

Rationale for the Bill: prior to news of the vetoes, Rio Times reported that "at present, oil-producing states such as Rio de Janeiro, Espirito Santo and São Paulo, together with the federal government, receive the vast majority of royalties paid by oil companies in Brazil.  The trio of states will see their share decline under the new royalties bill, and they are now pinning their hopes on a presidential veto."

The level of proposed change was startling: according to www.globo.com the Bill would see the combined share of revenue accruing to producing States/Municipalities and the Federal Union fall from 82.5% this year to 55% in 2013 and 44% by 2020. The Rio Times quotes a figure of R$4 billion next year, rising to a total of R$77 billion by 2020, in lost revenue to the state of Rio de Janeiro, noting that the "majority of Brazil’s current oil production comes from oil fields off the coast of Rio de Janeiro and São Paulo. The discovery of huge deep-water ‘pre-salt’ oil reserves has heightened tensions over how future royalties should be shared between Brazil’s 27 states."

The bill was written to have retroactive effect with respect to the sharing of revenue from the (Federal) treasury onwards to the States/Municipalities. For Luciana Braga, Analyst at the Brazilian National Agency of Petroleum, Natural Gas and Biofuels, speaking to the EI Source Book, this is the most "delicate issue" of all.   This has now been resolved with a decision against retroactivity, see above.

Legislative Context: existing legislation - quoted from ANP download Brazil, Exploration and Production of Oil & Gas Legislation:

  • Law 9478, of August 6, 1997, regulates the national energy policy, creates the National Energy Policy Council (Conselho Nacional de Política Energética — CNPE) and the National Agency of Petroleum, Natural Gas and Biofuels (Agência Nacional do Petróleo, Gás Natural e Biocombustíveis — ANP);
  • Law 12276, of June 30, 2010, authorizes the Union to directly assign to Petrobras, with due compensation, the activities of research and production of oil, natural gas and other fluid hydrocarbons in areas that contain up to 5 billion barrels of oil equivalent; and
  • Law 12304, of August 2, 2010, authorizes the Executive Branch to create the state-run enterprise Pré-Sal Petróleo S.A (PPSA). Law 12351, of December 22, 2010, regulates the exploration and production of oil, natural gas and other fluid hydrocarbons, under the production share regime, in the Pre-salt polygon and other strategic areas; it establishes the Social Fund and amends provisions of Law 9478.


Hiatus: Rodrigo Marcussi Fiatikoski concludes his analytical statement to the Source Book by stating that "In fact the news is good since after sort out this topic on how to have a agreed model to share the petroleum revenues among government entities, the federal government will feel comfortable to give a “go-ahead” to ANP trigger the next bidding rounds".  This refers to the hope, also expressed by the Rio Times, that the Brazil Petroleum Royalties Bill could be to "open the way for two oil concession auctions next year, ending a five-year hiatus. The first auction is set to take place in May 2013, with the sale of rights to 174 conventional oil blocks, half of them onshore and half offshore. A majority are likely to be located in the Equatorial Margin, a new offshore area near the mouth of the Amazon River. A second auction is scheduled for November 2012, this time focusing on Brazil’s ‘pre-salt’ region."

However, it remains to be seen whether timely agreement on the Bill can be achieved.  As Rigzone.com reports: (whilst) "the president avoided a showdown with two of Brazil's most powerful states, Rio de Janeiro and Sao Paulo, by restoring their rights to revenues from oil wells that are already in production. The administration, however, will have to work hard to persuade lawmakers from the nonproducing states- which have an overwhelming majority in Congress - to avoid having the president's changes overturned.  The same source notes that Brazilian officials have urged Congress to approve the president's changes if only for reasons of pragmatism to help get the industry get back on track, including successfully holding an oft-delayed auction of new exploration areas that is now scheduled to take place in May 2013.

List of Brazilian Downloads on the Source Book:

 

Additional Reading:

 

Constitutional Context:  for more information, please see (full text) paper "The New Model for Distribution of Royalties and Oil and Natural Gas Cooperative federalism" (in Portuguese), by Daniel Augusto Mesquita, Post graduate studies in public law. Prosecutor of the Federal District, and Chairman of Attorneys Association of the Federal District.

Abstract: "This article examines the constitutionality of the new regulatory frameworkoil and natural gas. The focus of the study is the relationship between the new distribution royalties arising from mineral resource exploitation on the continental shelf contained in the House Bill No. 7/2010, approved by the Senate with amendment proposed by Senator Pedro Simon, and cooperative federalism adopted by Brazil. One of the functions of that federalism is the realization of social justice inter regional (=equality) and the allocation of resources through funds is one of the instruments for realization of this equality. In addition, the text discusses the consequences of the judgment ADIs 875, 1987, 2727 and 3242 in the distribution of resources under new milestone regulatory."




60) 14.11.2012: EI Source Book at the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF)

Professor Peter Cameron recently led a CEPMLP team to the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF), which holds an annual meeting in Geneva at the UN Palais des Nations, and at which the Centre’s Extractive Industry Source Book project was presented. One of CEPMLP’s alumni, Dr Leonard Kalindakafe (see below, with CEPMLP Director, Prof Peter Cameron), the head of the mining division of the Malawi Ministry of Mines, is the Chair of the IGF and we are naturally very proud of his achievement in reaching such senior positions.

Peter and LeonardThe (IGF) is a voluntary partnership for global dialogue on the role of mining in sustainable development; it is also a partner to the EI Source Book project. 

Stemming from the World Summit on Sustainable Development in 2002, the IGF has become the leading global intergovernmental policy forum on practical issues related to the sustainable management and development of the mining sector. 

The IGF also serves as a forum for dialogue between its 45 member states, observer countries, and representatives from international organizations, civil society, mining companies and industry associations.  The Canadian International Development Agency (CIDA) houses the IGF's Secretariat.

attendees at IGF

This presentation to the IGF was an invaluable opportunity to present directly to this primary target audience of this Source Book project, namely government officials of resource rich, developing countries. It was highly interactive with delegates suggesting search terms for the website: Liberia; and Namibia, both of which searches returned country-specific downloads.

IGF Presentation by Patrick Chevalier, Natural Resources Canada:





61) 01.10.2012: Interview with Dr Sébastien Manciaux

The following video was recorded at the Library of the Research Center on the Law of Markets and Investment (Centre  de Recherche sur le droit des investissements et des marchés internationaux, CREDIMI) at the University of Burgundy, Dijon, France. The Centre has developed a core of research on emerging forms of self-regulation and on the development of the transnational law of international investment and commerce. CREDIMI was founded in 1967 in Dijon and is affiliated to the French National Center for Scientific Research (CNRS) and the University of Burgundy.  The below October 2012 interview is with Sebastien Manciaux, member of the CREDIMI and Professor at the University of Burgundy.  

 




62) 01.08.2012: Interview with Sheila Khama

Sheila Khama is the Director, Extractive Resources Services, at the African Center for Economic Transformation (ACET) is an economic policy institution, dedicated to promoting the long-term growth and Transformation of African economies. ACET is an EI Source Book partner; read their 1st March report on their work with the EI Source Book and CEPMLP, the lead partner.

"The inclusion of  ACET in the EI Source Book partnership is especially welcome and valuable due to both what it demonstrates about our commitment to Africa and how it will allow us to build stronger and deeper foundations for our collective work there.  We recognise the geographical diversity that exists across Africa and our partnership with ACET brings us far closer to the extractive industries in each of those many countries where ACET transformational work is already helping to better leverage far more effective, sustainable and transparent exploitation along the value chain of national resource endowments", Prof Peter Cameron, EI Source Book and CEPMLP Director.

 




63) 01.05.2012: Interview with Dr Duncan Clarke

The below February 2012 interview with author Dr Duncan Clarke, highlights, inter alia,  some of the sector's organizational and institutional factors impacting on the development of the extractive industries in Africa; all views are the author's own and do not represent any policy or endorsement by the EI Source Book or its editors. 

Dr Clarke is a leading authority on Africa, building on 40 years’ experience in economics, Africa advisory practice, and visits to 46 African countries.  He is President of the African Institute of Petroleum, and Recipient of the South African National Energy Association Award 2011.

Question 1)  How deleterious an effect do you think Western 'vacuous moralising and cant', to quote one of your books, has on the prospects for Africa in achieving better outcomes from its oil and gas industries?

Response: "The African oil and gas industry is driven by competitive investment opportunities and economics of ventures. Many NGOs and other parties inclined to 'advise and fix' Africa do so for their own political or vested interests, much of which has little bearing on the realities on the ground or the best strategies for economic growth in Africa. The main problems within the oil/gas game arise in the spheres of Africa’s politics, and amidst its politicians, not from some vague idea about an 'oil curse' – this often used as a pseudo-intellectual substitute for knowledge on actual conditions and clear thinking."

Question 1) Are efforts to try and 'fix Africa', led from outside of that continent, wholly counter-productive or can they achieve some real benefits regardless of their external motivation?

Response: "Many claims made to 'fix' Africa and reshape its oil game go unheralded. Most have been aligned to political strategies designed to raise barriers to new ventures and investment, with tougher regulation and higher taxes resulting , and so they typically invoke “models” applied elsewhere, often irrespective of local conditions and realities."

Question 3) To what degree are 'pre-capitalist economic modes' still inhibiting African ambitions for its oil and gas industries?

Response: "Africa has a unique mix of medieval and modern economic modes, the oil industry part of the latter that is interfaced with the former both at ground level inside and around communities and at the state level where Governments often act as a mix of both. Often it is the “modern” state in Africa that has been its own worst enemy in applying restrictive policies that limit potential investment."

Question 4) What game-changers can you identify for Africa to help it shift gears from mere economic subsistence behaviour to a mindset of stable economic development and shared wealth creation?

Response: "The overwhelming requirement for Africa’s future is to maximise long term growth in GDP and per capita over time, preferably consistently over the decades, and to do this high rates of savings and investment are essential, including open regimes to attract FDI and a wide mix of corporate players, including domestic firms."

Question 5) Which are the star performing African countries in terms of oil and gas exploitation?  What do they have in common that allows them to be so successful?

Response: "Currently, Mocambique stands out given the recent history of large gas discoveries offshore and a track record in attracting corporate players, small and large. The keys to success here have been the adoption of independent licensing, lack of resource nationalism (to date), a state company that is commercialised, and a relatively acceptable fiscal regime (aligned to prospectively) with regular and well managed bid rounds. Mocambique would be advised not to fall for the seductive charms of resource nationalism or policies proffered that would create disincentives to new investment."

Question 6) Now that oil is the number one export of Africa, is there scope for African nations to take a more aggressive approach to local procurement requirements of international oil companies and hence redirect more supply chain spending to local, rather than foreign, companies?

Response: "Several countries have attempted to instil local content requirements and mandate indigenisation policies, both of which are self-defeating in that they tend to make for more regulations, higher costs to operations, impose barriers to entry, and can be inflationary. Encouragement of the natural growth of the industry is the best strategy to go forward, and in time the economics of operations will be the best driver for local facilities investment. Forced or mandated localisation policies have several negative consequences including impacts on efficiency and the extent and speed achieved in unlocking of the natural resource capital base."

Question 7) The recent cutting of retail petrol subsidies in countries like Nigeria has provoked very angry responses from citizens who consider that their sole benefit derived from their nations’ oil wealth are such subsidies.  Is it wise for such subsidies to be cut?

Response: "Yes. It is a matter of reshaping the economy, placing product prices on levels to reflect costs, and rid the system of distortions, in this case smuggling and the constraints and unintended consequences that follow, and undermine domestic refinery investments."

Question 8) In your writing, you make much of contextual factors in explaining your arguments. Is there a reason, personal or intellectual, why you give so much weight to context and history in examining African oil and minerals?

Response: "Historiography in Africa is very important – for understanding and situating the Continent in its evolutionary epochs. Without context there can be no real understanding. In the resource world of oil and minerals, it is critical to appreciate that the unlocking of these non-monetised assets and the proper reinvestment of the residual revenue, lie at the heart of the prospects for maximal future growth in Africa’s GDP, and the reduction of poverty and backwardness as still found in many economies."

Disclaimer: all interviewees' views are their own and do not represent any policy or endorsement by the EI Source Book or its editors.